Author interview: the faith factor in investing
- Wednesday, February 16, 2000
Peter Tanous is a delightful and intelligent market expert in Washington, DC, where he presides over one of the top investment consulting agencies for the selection and monitoring of money mangers for institutional and individual investors.
Peter has dedicated his life to determining what traits make investors great, and has written two books on the topic -- Investment Gurus, a national bestseller, and The Wealth Equation. (Click here to read crosswalk.com's review of the The Wealth Equation.)
I greatly admire his sophistication and class, which is balanced with an open-minded ability to admit to unexpected surprises in his work, even when they go against the grain of traditional Wall Street orthodoxy. I am certain that you will gain a great deal of encouragement from his writings and thoughts in the interview below.
In the midst of your research for your two investment books, were you ever surprised? Did you find anything of significance that perhaps wasn't expected?
The single most surprising thing I found-although my sample size was small with Investment Gurus -- was the number of great managers I spoke to who also happened to be very religious. I didn't know if there was a correlation and my sample was small, but I resolved to try to find out more about the faith factor in my second book, The Wealth Equation.
In The Wealth Equation, you noted a positive relationship between investment success and faith in God. You also wrote, "I'm still not sure whether people are really very interested," in this relationship. What type of overall reactions did you receive to The Wealth Equation?
It's interesting when I do interviews-especially radio and TV interviews-the faith question does come up. Why does it come up? It comes up because it's unusual. It's not something you usually see. I don't moralize about it, because I don't think it's my role to-I just report it. I surveyed 100 investment managers before writing theThe Wealth Equation , and included a little question, "Is religion important to you?"
And I got an outpouring. Money managers sent me verses from the Bible. I got a great, enthusiastic response. A larger percentage of successful money managers were people of faith, as compared to the population as a whole.
So you determined that faith is important in investing?
We don't know, but why not play it safe? The safe thing is to assume that it is.
Did you receive any negative responses on your faith chapter inThe Wealth Equation?
No negative responses from the readers. Although a couple of the money managers I surveyed said no, faith should not play a role, this is a pragmatic business. But the opposite reaction was much more extraordinary -- with the outpouring. "Why is that?", I asked one of the managers.
He said, "Because investing itself is an act of faith." You're really investing for the future, based upon your analysis of what may happen in the future. You think a company is going to do well and the stock will go up. Faith is also a bet on the future, isn't it?
Did your idea of faith change while writing the books?
Yeah, I paid more attention to it, and I started to feel more comfortable in the notion that faith in investing -- and let's face it -- in anything you do, is important.
In regards to those individuals you interviewed who professed to be Christians. How do the Christian money managers balance their focus on making money, money, money -- with the Bible's warning against the love of money?
In a number of different ways that make sense. The easiest way to do this is to be Calvinist, which works out great. If you make a lot of money, God is basically pointing to you as one of the good guys. That's an easy answer. Now, there are not a lot of Calvinists around -- maybe in Switzerland somewhere.
I think the right way to do this is to judge what rich people do with their money. Do they use it to help their faith directly or indirectly, or to help mankind? Jim Barksdale, a founder of Netscape, recently gave $100 million dollars for education in Mississippi. If I see something like that, I say to myself, aren't you glad that this guy got rich?
In your view of Christians in the United States, how do you think we can be better witnesses in the way we approach money and investing?
The single best thing we can do is to have a purpose for the money. Somebody who is avaricious and greedy is not going to set the example that I want any of my kids to follow. Like Jim Barksdale. I hope there are many more people who get as rich as he does, and do as much good as he is doing.
Click here to read crosswalk.com's review of the The Wealth Equation, in which Peter Tanous writes about investing according to your personality type.
Click here to read Mary Naber's interview of one of the investment managers featured in The Wealth Equation, Faith and Finance with Foster Friess.
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