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  • Can Reading Fiction Make You a Better Investor?

    Posted by David Foster on December 16th, 2011 (All posts by )

    In this post from last month, I cited a study which suggests that reading/viewing fiction can help to develop social intelligence and empathy.

    Here’s someone who makes a similar argument about fiction-reading and investing.

    (via Barry Ritholtz)


    2 Responses to “Can Reading Fiction Make You a Better Investor?”

    1. Shannon Love Says:

      I shall reframe from making any comments about most financial reports and investment guides being works of fictions.

      Whoops, to late.

    2. David Foster Says:

      Speaking of financial reports, etc….analyst Laura Rittenhouse asserts a measurable connection between the clarity vs obfuscation index of the CEO’s annual shareholder letter and the company’s subsequent performance. (In her 2010 report, Sherwin-Williams came out first on the “clarity” side, with Cisco worst in the other direction.)

      Also, a study cited here suggests that use use of language suggesting “charistmatic vision” in shareholder letters has tended to lead to a higher % of “buy” ratings from analysts…along with excessive earnings forecasts from the analysts.

      It would be interesting to plot the letter on 2 axes, with the “charismatic vision” score being one and the “clarity vs obfuscation” score being the other.