In today’s episode we are joined by JC de Swaan. De Swaan is a lecturer in the economics department at Princeton University, where he teaches courses on ethics in finance and Asian capital markets. He is also a Partner at Cornwall Capital, an investment fund based in New York City. In this episode, we learn about the ethical considerations that finance professionals encounter.

For more info about the podcast, go to the episode page and make sure to follow us on X/Twitter. We love to hear your thoughts on what you like and what we can improve, so please give us your rating and a review. You’re also very welcome to tell us about great authors, books, and investors you want to hear on the show. Thank you! /Eddie & Niklas with team

This episode was recorded on Jan 25, 2024.

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Episode Chapters

(00:00) Introduction by Eddie & Niklas

(01:58) Welcoming JC

(04:26) A specific moment where JC realised what he wanted to do

(05:55) Seeking Virtue in Finance

(10:12) The discrepancy between how finance is perceived and its intention

(12:47) The four pillars of conduct

(25:40) A sound fee structure for managing money

(33:26) JC’s idea of a perfect fund structure

(36:50) Extracting societal value while serving your customers (Sävås säger moving on)

(43:22) Can investors in the secondary market create value for society?

(50:45) More money goes back to shareholders than go in through equity issues

(53:40) The financial crisis and JC’s view on short-selling

(57:15) How Capital Group balances stakeholder interests

(59:24) Salary spread within an organisation/Musings on compensation

(01:05:21) Discussing corporate culture

(01:08:36) How to protect yourself from skewed incentives in a finance career

(01:15:39) How to benefit society as a whole

(01:21:22) Could Buffett have improved in terms of ethics

(01:23:53) Cornwall Capital

(01:29:45) Resemblance between Pinecone (episode 51) and Cornwall

(01:30:47) How JC allocates his time

(01:33:38) Is JC following his own book’s advice at Cornwall

(01:37:33) Cornwall’s returns

(01:38:01) Book discussions

(01:42:20) Concluding remarks

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Books Mentioned

• Seeking Virtue in Finance - JC de Swaan

• Quality Investing - Lawrence Cunningham
• Wisdom in Finance - Mihir Desai
• The Checklist Manifesto - Atul Gawande
• Investment Biker - Jim Rogers
• What Money Can’t Buy - Michael J. Sandel
• Enough - John Bogle

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Companies Mentioned

• Vanguard
• Berkshire Hathaway
• Pinecone
• Cornwall Capital

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More on JC

https://twitter.com/jcdeswaan

https://jcdeswaan.scholar.princeton.edu/

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About the Podcast

Intro episode: https://www.redeye.se/podcast/investing-by-the-books/817383/0-intro-to-investing-by-the-books

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What is Investing by the Books?

Investing by the Books was founded by Henrik Andersson, Bo Börtemark, Mats Larsson and Michael Persson. It has published hundreds of book reviews in the past 10 years and operates on a non-profit basis.

Visit the website: http://www.investingbythebooks.com/

Follow on Twitter/X: https://twitter.com/Investbythebook

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What is Redeye?

Redeye is a research-centered boutique investment bank from Stockholm. Founded in 1999, Redeye cultivates investors through timeless knowledge, a humble attitude, and a strong focus on quality.

Visit the website: https://www.redeye.se/

Follow on Twitter/X: https://twitter.com/Redeye_

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Disclaimer

Notice that the content in this podcast is not, and shall not be construed as investment advice. This information is meant to be informative and for general purposes only. For full disclaimer, visit Redeye.se