You might ask why a very successful professional at the top of her game might leave the comfort and prestige of a hard-won executive role leading the largest research team in the world to go on a pilgrimage, build houses in 20 remote countries for Habitat for Humanity all while roping in a degree from the Harvard Divinity School! You might wonder further: how in the world did she re-orientate her approach to her vocation, which is investing, from the dark pool of massively efficient number crunching to a more effective and rewarding approach based on lessons learned from Nature! Did she lose her mind? Hardly. The key to Katherine Collins' new world was arrived at just because she is a grand and artistic thinker who thinks things through to very important, conclusions...conclusions which shake the foundations of the financial world as we have known it. What this book uncovers in a gently humorous and loving way is that the financial world has lost its orientation to what is real.
This book is a pleasure to read because each section begins with interesting anecdotes from nature as metaphors or new models for effective investment. For example, the fact that we expect companies to grow and grow without spending on research and development is contrasted with the spurting growth of a sunflower which needs an equal rooting below the surface in order to stand tall and follow the sun. This invisible development below the ground is an image for the inner development that like "secret sauce" feeds the best companies in sustainable growth.
Ms. Collins does not come across as a sentimental tree-hugger who believes Nature is always nice. Her analysis of markets go into more detail than some readers will want, but I urge you to read through because the lessons from Nature just keep coming and their applicability goes beyond the world of investing. How many of us will recognize the tendency to lean on the apparent efficiency of systems, while losing touch with what truly matters? This would not happen in natural systems because they tend to adapt remarkably to change in resilient ways that do not just bounce back to the same old same old. They evolve. Who would not want to be more effective in their work, optimizing what matters in dynamic ways that are mindful of those we are serving? Again, pictures from nature underline this approach to life and to a way of investing which is regenerative.
The reader is left largely to think this through for herself. It is not prescriptive and there are definitely more indications of what isn't working than examples, in detail, of what is. The author does not pretend to have all the answers, at least not yet; and invites us to explore with her, the question, over and over again: What would Nature Do?
This approach was easy for me to accept because I began my working life as a bio-dynamic farmer and had come to realize that almost everything I needed to know about investing I could glean from the lessons I had learned from the land. It will certainly be a harder read for quantitative analysts who are glued to their screen 24/7. If they do read it they might just take some breaks and go outside, not to smoke, but to breathe and take in the day. And that alone might make a huge difference in their effectiveness. They might then see connections they had missed before, patterns for whole systems that were out of their previous purview.
Katherine Collins is the founder and CEO of Honeybee Capital, "dedicated to pollinating ideas in pursuit of optimal investment decision-making.(from the book jacket)." I believe that this book will encourage investors to think "outside the box" in ways that will build bridges to a better world. It is clear that all decisions have an impact, whether positive, negative or neutral (reinforcing the status quo). Investors are beginning to wake up to the fact that investments are now the tail wagging the dog. In other words investors have it in their power to choose the future they want and support it through their positive and broadly based approach to investing. The systems we are using, Collins points out, are doing what they were built to do. Now we can change them to do something even better.
The clarity and thoroughness of thought in The Nature of Investing is simply fun to read. The author has a way with words that helps the concepts stick. As she summarizes: "Here are the transformations needed, the steps on our path toward reclaiming the true nature of investing:
•From efficient to effective
•From synthetic to simplified
•From maximized to optimized
•From disconnected to reconnected
•From mechanical to mindful
•From static to dynamic"
It is now my challenge as a money manager to take a deep breath and look again at how we can become more resilient, more regenerative and more connected to what matters.