A matter of faith

On the notable inclusion of what the market's main characters believe

Hello and welcome back to Late, a newsletter about things I haven’t stopped thinking about.

It’s been a few weeks since we published as life events got in the way, and after about 15 months of near-weekly publishing, this kind of irregular cadence feels more realistic. It was great during the throes of a pandemic to have a weekly side project to commit to; fortunately, some of these circumstances are changing.

When Late does publish it will still happen on Sundays. Whether this happens weekly, bi-weekly, monthly, or otherwise is TBD.

I suppose there is some small fraction of subscribers who will leave as a result of less regular publishing and by extension a less reliable commitment to this space. But we all have enough newsletters coming to our inboxes these days, and outlining a future in which this one comes through less regularly seems unlikely to rankle many readers.

And now, religion.

Pam Beesly famously said that she felt God in a Chili’s. 

Run this line through its academic paces and we ask: is it funny because Pam feels the presence of God or because she’s in a Chili’s? Or rather, does the punchline hinge on Pam’s faith or on that faith existing in a casual American dining outfit?

Over the last month or so, business media has been concerned with two main characters: Cathie Wood and Bill Hwang.1 But there’s also a third character that fills out this new coverage universe: God. 

The Christian faith of both Wood and Hwang has been the primary piece of character building in stories about both investors. And so we here at Late emerge from the chaos of moving to revive the newsletter on this Easter Sunday, the day on which we celebrate Christ’s resurrection. And ask as we do of Pam whether the punchline is about these investors’ decisions being made because of their faith or alongside it?

From the WSJ on Friday:

Mr. Hwang was open about his faith and liked doing business with other Christians, sometimes commenting if a colleague wore a cross necklace, according to a Wall Street banker who worked with Mr. Hwang. He regularly discussed his charitable foundation with visitors and emphasized the importance that community service played in his life, talking with pride about various projects he and his mother had supported. [...]

As his gains piled up, Mr. Hwang sometimes viewed his profits through the prism of religion.

“Do I think God loves it? Of course!” Mr. Hwang said in a video, referring to his early investment in LinkedIn. “I’m like a little child looking for, what can I do today, where can I invest, to please our God?”

And here is the FT writing about Cathie Wood last month:

The open secret to Wood’s investment beliefs lies in the name of her fund — a direct reference to the gold-covered chest described in the Book of Exodus as containing the two stone tablets of the Ten Commandments.

Indeed, the 65-year-old divorced mother of three is a devout Christian who starts every day by reading the Bible while her coffee brews, and who relies on her faith during testing moments, such as the many market upheavals she has experienced over a four decade career in finance. “Each of those times was a time of deepening my faith,” Wood has said. [...]

Wood is unrepentant. She dismisses talk of a bubble, and is open with investors that her bets are long term. After all, Amazon’s share price took a decade to reclaim its 1990s internet bubble peak — but investors who held on eventually made huge gains.

As Wood sees it, it’s all God’s work anyway. “It’s not so much about me and my promise. It’s about allocating capital to God’s creation in the most innovative and creative way possible.”

Wood and Hwang are surely not the only members of the Wall Street community who go to church. They are also not the only members of the investing world with deeply held religious beliefs, Christian or otherwise. And so the repeated mentions of the role faith plays in investing decisions at ARK and Archegos — the latter of which translates to “prince of Christ” — thus read like some not-so-subtle digs at their processes. 

Featuring Hwang’s faith so prominently during this embarrassing professional episode toes the line between color and judgment, between descriptive and dismissive. And this placement looks not dissimilar from how Cathie Wood’s faith becomes an extension of some of the credentialism that has come to dog the analyst team at ARK over the last several weeks. Not only are your funds suspect if your analyst team isn’t full of CFAs, but it’s even dodgier if you’re citing scripture along the way. 

The conventions of profile writing, of course, ask the author to bring something beyond professional accomplishment (or failure) to a story. If Wood and Hwang’s personal lives are indeed informed first by their faith, to not reference these foundations would be committing narrative malpractice. That they are both practicing Christians who seem to use some part of this faith in their investment process is relevant to understanding these stars of the investing moment. But given the depth of the belief system inside of which investing and the media that covers it exists, one asks what is really being criticized.

The market-based, quasi-capitalism that defines American business — and by extension American financial markets — is obviously faith-based. The dollar is backed by the full faith and credit of the U.S. government and from there the belief systems multiply. Joe Weisenthal famously made the case for Bitcoin’s religiosity back in January, but this is far from the only financial instrument with similarly devout followings. Take any idea within the ecosystem far enough and at the bottom we find religion — loan documents have covenants, interest rates have natural levels, investments earn returns. 

All industries have conventions and norms. Few hold their core set of ideas as closely as the world of finance. The most virulent arguments within finance are not about the primacy of the capitalist, market-based system the global economy continues to trend towards, but about the purity of that trend. Passionate arguments happen not between believers and non-believers, but between those who believe absolutely and differ only in kind or degree. That capitalism and markets are the best economic systems for creating the most widespread prosperity goes without saying for those in the business of moving money around for other people. Capitalists do not question the existence of their god. 

But this newfound exploration of the personal faith of some investors, however, lays bare not the waywardness of scripture but the emptiness of investing. The writer Ted Chiang spoke in an interview with Ezra Klein this week about science and magic and raised an overlooked truth about the scientific inquiry we know today as foundational. 

Many Renaissance scientists, they were profoundly religious. And they saw no conflict in that at all. And for them, understanding how the universe worked was getting to know God better by understanding his creation more clearly and feel like that the wonder that comes with understanding how the universe works is very closely related to religious awe. 

I think that when scientists discover something new about the universe, I imagine that what they feel is almost identical to what deeply religious people feel when they feel like they are in the presence of God. I wish that we could get back a little of that attitude, instead of thinking of religion and science as being fundamentally diametrically opposed. 

And the idea that science drains all the wonder out of the universe, I don’t think that’s true. I think science adds wonder to the universe. And so, I feel like one aspect of that earlier attitude of when scientists could be religious, there’s one aspect of that, which I think I would like it if we could retain.

In this we see the direct echoes of quotes cited above from both Wood and Hwang. Their investments are not about serving capital but about serving God, about trying to answer the questions He asks of His children, day in and day out.

The centuries that have passed since these Renaissance-era scientific truths were uncovered have been spent validating, refining, and codifying these concepts as what we might simply call human knowledge. The roundness of the earth, the strength of gravity, paths the stars travel. We’ve proven intuition with numbers, made textually formulaic the wonders of the universe. Economists and financial market practitioners are often said to have physics envy. Perhaps it is the mathiness of physics and the cultural association advanced math has with advanced smarts that makes economists and finance PhDs feel inferior to their STEM brethren. But in contrast to economics, what physics has so far proven — and works to further validate — actually offers progress on the questions of what it means to be human, why we’re here at all, and what happens next; all economics and markets manage to tell us is who consumes what and why.

We’re coming up on commencement season, which means the annual recirculation of David Foster Wallace’s 2005 speech to the graduating class at Kenyon will begin soon and remind us — “There is no such thing as not worshipping. Everybody worships. The only choice we get is what to worship.”

And while these words certainly constitute the headline of Wallace’s message, the meat of the thing suggests it is only God or something God-like that will help us make it through this life, empower us to discover whatever small version of a foundational truth we happen upon. 

Modern meanings of what it means to live a good life are often framed through a consumptive lens — through the ability, right, or desire to spend on certain goods and services instead of others. But the pursuit and acquisition of additional purchasing power is always vacuous. Because unlike those posed by religious systems, capitalism really asks no interesting questions of its faithful. It is a system that points in directions which converge over time back to you: I have, therefore I am. 

The exploration of one’s faith, in contrast, is never finished, never converges on a set of correct answers. A belief or a disbelief in God constantly asks of us new questions demanding new challenges to what we think we know. If understanding the cosmos brought Renaissance scientists closer to God, then investing in good businesses also brings Wood, Hwang, and other similarly devout investors closer to Him.

And while the profession of investing does not ask whether you believe in God but only whether you’ll generate positive risk-adjusted returns over time, it seems to me inappropriate that a focus on the former would discredit someone’s efforts to achieve the latter.

Then again, God doesn’t ask me to worry about what others think of my faith or the faith of anyone else. And especially not on Easter Sunday.