05 Sep 2014
Keeping Education in Check
David Berman is on a global crusade
to teach chess to childrenby Maureen HarmonTopics:
Berman, with one of his young sons. (Photo by Tracy Powell)
David Berman (MBA 1991) is a successful hedge fund manager and a regular commentator on CNBC and Bloomberg TV, who has been deemed “the king of the retail jungle” by Fortune.
But none of this, he says, would have been possible without the game of chess.
The founder of Berman Capital and its hedge fund Durban Capital, Berman says the game helped to get him away from bullies who teased him for his small size. (Though a star tennis and squash player in his hometown of Durban, South Africa, he often sought the peace of the school library, where he could play chess away from the physical world of the schoolyard.) He traces his disciplined approach to the financial world and some of his financial smarts as a hedge fund guru back to chess. And he’s quite certain it was chess that brought his grades from a D average in high school to a B in a month and a half, when he began playing daily and studying hard. Chess, Berman says, even gave him the smarts to get into HBS.
Berman treats the game like a religious vocation and he preaches its virtues wherever he goes, often sending chess sets to friends with small children in the hope those parents will teach their children a game that dates back to the 6th century Why? In short, says Berman, the 1,500-year-old game makes kids smarter. (Berman’s own oldest son is ranked No. 11 in the country for his age group and his 6-year-old recently earned the No. 3 spot among kindergartners. Both boys play against billionaire investor George Soros for practice.)
It’s not just Berman’s own history and hope for the future success of children that motivates him—he notes that there is real science behind his belief. In 2000, for example, researchers found that 120 hours of chess instruction for African American children living in the rural American South resulted in increased academic abilities across the board, from spatial analysis to mathematics scores to reasoning. In 2003, William Bart and Michael Atherton of the University of Minnesota wrote a paper that discussed the neuroscientific implications of chess playing on the brain. One such theory is that, as chess players increase their skills, they increase the use of their frontal lobes—the part of the brain responsible for memory and determining consequences of actions.
Chess, according to Berman, teaches children to think strategically, and perhaps most importantly, it teaches them empathy. “You have to put yourself in someone else’s shoes,” he says, noting its relevance to his hedge fund work. “Chess gives you a general sense—all the time—of thinking: If this happens, that happens; win a piece, lose a piece. “Anytime you buy a stock, you have to think about what the world is thinking. What the world will think in a given set of circumstances.”
Berman feels so strongly about what the game can do for a child’s future that, in 2006, he founded Chess for Change, a nonprofit aimed at teaching chess in South African schools. When Berman began making the case for chess to the public and the government, it was considered an after-school activity for privileged children. So he teamed up with David MacEnulty, president of the David MacEnulty Chess Foundation and inspiration for the 2005 TV film Knights of the South Bronx, which tells the story of MacEnulty and the chess lessons he brought to Bronx Community Elementary School 70. (The children went on to win the state championship, but they also started to perform better in the classroom.)
Together, MacEnulty and Berman headed to South Africa and began to spread the chess word through speaking engagements and with the help of a PR company hired by Berman. Their campaign worked. Other charities popped up as a result of Chess for Change. Moves for Life now coaches more than 12,000 students a week in South Africa. ChessKIDS Academy is also coaching 12,000 South African children in 65 schools. Berman estimates that 100,000 kids have learned the game in the classroom through the joint efforts of Chess for Change and these other charities. And if he has his way, students all over the world will someday be advancing pawns and attacking bishops as part of their daily curriculum.
One need only look at the career successes of chess players to see why Berman thinks it’s a “no-brainer” to train children to play chess. Peter Thiel, PayPal’s cofounder, is a chess master. Douglas Hirsch, Seneca Capital founder, plays too. Ken Rogoff, professor of economics at Harvard, has been playing since he was 6. Danielle Rice, senior managing consultant at IBM’s Healthcare Practice, plays. So does Bill Gates.
And Berman, whose company manages about $100 million, is not alone in the financial realm either. “So many people in the investment world have bull-market mentalities,” David Norwood, a grand master, told the New York Times, in its 2001 story on successes among hedge fund managers who play chess, “They do well when things are going well.” But chess, the article states, can make good investors great by teaching them how to anticipate and handle missteps along the way.
Berman certainly enjoys his life as a hedge fund manager specializing in retail and believes he’s pretty good at that game too. He still thinks of his career success as a job—a fun job, to be sure—but work nonetheless. His real passion, he finds, is in teaching children a game that just might make them more successful people in the long run. Somewhere among those kids at the national chess championship might be the next George Soros or Bill Gates, he figures. It’s that bet, says Berman, that has made Chess for Change one of his biggest—and best—investments.
Class of MBA 1991, Section F