Disclosure: I’m currently working with HIP Investor.
This post is a book review for The HIP Investor: Make Bigger Profits by Building a Better World.
The short review?
If you're interested in this topic (and why are you reading my blog if you're not?) go buy it! (Or ask your library to do so, and then borrow it). It’s got a lot of anecdotes, it explains the methodology HIP uses, it points you towards data sources… a very useful book! It’s a great gift for people who wonder how to invest money or time, whether that’s a new graduate, a career-changer, or an investor or philanthropist.
The HIP methodology makes it straightforward to understand how to look at intangible assets within an organization and relate that to financial performance. It will move you past the fundamental assumption of the Efficient Market, and as you can imagine, this jazzes me silly! (How? Why? Well, now it's time for...)
The Full Review
Jerry Michalski hosts Yi-Tan calls, which are conversations about change. He recently had a talk about Brain Function and Western Culture, with Iain McGilchrist who wrote The Master and His Emissary: The Divided Brain and the Making of the Western World, a book based on his career-long observations about how the left and right hemispheres are differentiated and how they communicate.
From the call alone -- I haven't read his book yet though I'm eager to -- the "long story short" is that the right hemisphere takes in far more information and doesn’t categorize it, while the left brain requires structure and simplicity. The author points out that the perception of our world is, specifically, subjective perception, and he believes that we're in a period of history where the left brain is dominating that perception at the expense of the right.
Because my mother was an artist and my father was a Scientist (well, a psychoanalyst, but he philosophized about science) I have been juggling exactly this issue for a long time.
In the field of social entrepreneurialism, we’re at the same point, where some early adopters love the right-brained, fluid, holistic approach, but where the greater mass of the population would prefer something consistent and codified. ("Should" and "shouldn't" don't pertain; it's simply a matter of dominant perceptions.) Burnt out by “Top 5 Ways to be Sustainable” lists, they know they need more substantive guidance, but to really understand the field still requires a large commitment of time and energy, and whether you happen to be a young grad trying to find a first job or an exhausted, middle-aged doctor, you just don’t really have time for that.
So if the leading edge of the curve is deeply enmeshed in right-brain stories, social enclaves, ad hoc TEDxVolcano flash forums, etc., what are those people who approach managing their money with a “just tell me what to do!” approach, to do?
This is where I believe the HIP Investor book, itself, shines. The HIP methodology is used and useful for everything from public portfolio to angel investment evaluation and management. But the book is a brilliant way to communicate with those 99% of the people in this world who just want a practical way to integrate their feelings about their personal values with their practical financial challenges. The vast majority of people need a set of practices to follow that will maximize their financial return and ensure their world is a joyfully liveable place.
It's not about "The Efficient Market Hypothesis" any longer! It's about "Impact Investing," and HIP Investor is a strong pioneer in the space, and Paul Herman and his team (search for Acknowledgments) are the ones who have put together a cogent and actionable book.
