What’s next in finance? Is bitcoin an inflation shield? What’s your favorite weightlifting exercise?
Lauren Cohen, the L.E. Simmons Professor of Business Administration at Harvard Business School, recently answered these and other questions about his work, workouts, and more on Working Knowledge’s “Office Hours” series. During “Office Hours,” HBS experts field questions from Instagram users, responding through short videos.
Cohen studies finance and innovation, producing research and courses about topics including fintech, asset pricing, patent trolls, and sustainability investing. In the gym, Cohen is a record-breaking amateur powerlifter, able to squat more than 600 pounds.
Here’s a transcript of the discussion:
Question: What is the next big thing in finance?
Lauren Cohen: The next big thing in finance is fintech, which is to say, how finance and the world of finance grapples with and integrates all of these advances in technology that will impact how individuals save, how they invest, and how they interact with all aspects of their finances.
"Keep your ear to the ground and your eyes open on fintech."
Now, importantly, it’s not just how financial firms use these [technologies]. Keep your eye on how every firm, from Nordstrom to Intel, integrates these into their processes. Keep your ear to the ground and your eyes open on fintech, and that’ll give you a good direction on the future of finance.
Question: Is it a good idea to place savings in bitcoin to protect it from inflation?
Cohen: No, not a good idea. Inflation moves in basis points, or one or two percent, whereas bitcoin moves in much bigger swings over the course of a day or an hour. Now, the only exception is if you’re in an economy with hyperinflation. Then, you might want to consider it.
Question: Aside from policies and incentives, are there other solutions to drive oil and gas investments?
Cohen: People and firms respond to incentives, so the only thing you can do is either reward or sanction. History has shown that if you want a path-breaking solution, you’ve got to go through rewards, so I’d strongly lean toward those.
Question: How important is advertising for big companies?
Cohen: Advertising is a lifeblood for corporations, even though how they’re doing it changes over time. They used to use billboards and newspapers; now, they’re using influencers and subtle product placement. As a savvy consumer, keep your eyes and ears open, because big companies will always be advertising to you, whether you realize they are or not.
"You squat every day, and your life will be better."
Question: Are you still weightlifting these days? What is your favorite lift of all time?
Cohen: That has to be the squat. It’s where I set my first world record. You take my word for it: You squat every day, and your life will be better. I am still working out. I also am actually preparing for the US Strongman National Championships this June, and it’s going to stream online, so I expect to see you there.
Question: What is your favorite podcast on finance and why?
Cohen: NPR’s Hidden Brain. Look, this is not a podcast about finance, or specifically about finance. It’s a podcast more about decision-making and all the errors and wonky decisions that people make and, importantly, how to make these decisions better.
Now, finance—financial markets, asset prices—are just the aggregation of all these biases, mistakes and difficult and complex decisions. So, the more you understand those, the deeper you’re going to understand all financial markets, from bitcoin to Tesla to the value of a dollar. Take my word for it: www.hiddenbrain.org.
Question: Who is your role model and why?
Cohen: My role model is, honestly, the better version of me. It’s that Professor Cohen who wakes up just a little bit earlier every morning, tries a little bit harder in the gym, learns a few more programming languages, and digs a little bit deeper into every area of his research.
Look, the truth of the matter is, I’m never going to get to that person, but that’s kind of the cool part. I can spend my whole life trying.
Follow @HarvardHBS on Instagram to participate in the next installment of "Office Hours."
About the Author
Kristen Senz is the growth editor of Harvard Business School Working Knowledge.
[Image: iStockphoto/dem10]
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