The Revolution Will be Publicly Traded

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Are investors suffering from a lack of investment opportunities? Some observers have declared that the role of the public equity market is in decline, based on increasing growth and activity in private markets. Jay Clayton, chair of the Securities and Exchange Commission, has also warned that shrinking public markets have reduced access to investment opportunities.

However, the best opportunities may be hiding in plain sight. Catherine D. Wood, CEO and chief investment officer of ARK Investment Management, expects disruptive innovation to propel existing companies to massive valuations. The biggest gains may come not from the ideas generated by hot new startups, but from the companies using those ideas to increase productivity and reduce costs. Read More

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Annie Duke: Accepting Wrong Gets to Right Faster

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Making Better Decisions

Who likes to openly admit that they were wrong? Not many people, although Annie Duke, former professional poker player and author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, finds that being wrong offers opportunities to improve her decisions.

Duke has said that she learns faster when she’s not afraid of being wrong. During her career as a poker player, she realized that most of our decisions are made against a backdrop of uncertainty — sometimes we’ll be wrong because we won’t have all the facts. Embracing our wrong decisions as opportunities to learn helps to make more effective decisions in the future.

Duke’s studies in cognitive psychology and poker playing have given her a unique perspective on probabilistic thinking. After 18 years of focusing on her mistakes and understanding the “why” behind the outcomes, she has added to what she calls “the stuff we know” box. Keeping an open mind and being receptive to ideas from those around us is how we fill this box and use it to our advantage.

So, how do you strengthen the muscles of admitting failure to become a more effective decision maker?

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Time for Financial Professionals to Sharpen Their Saws

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Time for Financial Professionals to Sharpen their Saws

How can you improve your professional performance?

“Sharpen the saw,” says Stephen R. Covey, author of The 7 Habits of Highly Effective People. Covey uses the metaphor of a woodcutter, straining to fell a tree with a blunt saw, to illustrate the importance of taking time to develop our skills. When we step away from our immediate responsibilities and focus on our professional growth — turning away from the proverbial tree to sharpen our saw — we set ourselves up to do our jobs better and improve our performance over the long term.

Covey’s insights raise an interesting question for financial professionals: What specific actions can we take to do our jobs better? Read More

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PIMCO’s Sundstrom discusses how to navigate the “recession moment”

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Geraldine Sundstrom, a managing director at PIMCO and portfolio manager who focuses on asset allocation strategies, keeps getting the same question from clients: “When is a recession going to come?”

At the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, Sundstrom argued that we aren’t at the end of the economic cycle yet. As she sees it, we are late in the economic cycle, and she explained how investors can position their portfolios to take advantage of late-cycle growth while protecting against the risk of a recession. Read More

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Understanding the Secrets to Perfect Timing with Daniel Pink

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The CFA Institute Annual Conference is an unrivaled opportunity to access high-quality, unbiased educational content that equips investment professionals with the latest thinking on critical industry issues. The 73rd CFA Institute Annual Conference will be held in Atlanta on 17–20 May 2020.



Are there really secrets to the best timing for activities and events in our lives? Best-selling author and behavioral science expert Daniel H. Pink asserts that there are. At the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, Pink shared some of the secrets that he gleaned from analyzing research on the timing of life.

According to Pink, research on timing has been siloed in many areas. Social psychologists, economists, linguists, anthropologists, and even endocrinologists have all conducted their own inquiries, looking at different aspects of similar problems. Pink sifted through the research to find evidence-based ways of informing the timing of our activities, work, and decision making.

Pink’s frustration with his own decision-making abilities led him to write When: The Scientific Secrets of Perfect Timing. He said that he was making all kinds of decisions about when to do things “in a sloppy way,” and he was looking for guidance that didn’t really exist. Read More

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Roger Ibbotson Explains the Price of Popularity

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The CFA Institute Annual Conference is an unrivaled opportunity to access high-quality, unbiased educational content that equips investment professionals with the latest thinking on critical industry issues. The 73rd CFA Institute Annual Conference will be held in Atlanta on 17–20 May 2020.



Record executive Scooter Braun employed a simple formula to achieve wild success with Justin Bieber and other artists: identify talented performers right before they become household names. Yale Professor Roger Ibbotson thinks that investors should maximize their returns with a similar strategy — a strategy that hinges on popularity.

At the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, Ibbotson compared a box of Bayer aspirin with a generic version of the drug. Their retail prices vary, even though the content is the same, and yet Bayer manages to attract a significant consumer base for their more expensive product. Stocks are no different, according to Ibbotson. “Popular stuff has higher valuations but lower expected returns,” he said.

Like many ideas in behavioral finance, Ibbotson’s thesis seems very common-sense. Its originality lies in the fact that unlike the CAPM, which correlates returns with risk, it considers the popularity of an asset. The model builds on CAPM to create PAPM, a Popularity Asset Pricing Model. Read More

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Where Has the Global Financial Crisis Left Us Today?

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The CFA Institute Annual Conference is an unrivaled opportunity to access high-quality, unbiased educational content that equips investment professionals with the latest thinking on critical industry issues. The 73rd CFA Institute Annual Conference will be held in Atlanta on 17–20 May 2020.


Where Has the Global Financial Crisis Left Us Today?

At ExCel London, the very venue where then-UK prime minister Gordon Brown and the G20 met in April 2009 to “save the world economy” during the global financial crisis (GFC), Adam Tooze addressed the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, about where the GFC has left us, how the crisis has affected politics and geopolitics, and what the prospects are for the world to manage a future crisis.

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Can Investment Professionals Avoid Creating a “Cobra Problem”?

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The CFA Institute Annual Conference is an unrivaled opportunity to access high-quality, unbiased educational content that equips investment professionals with the latest thinking on critical industry issues. The 73rd CFA Institute Annual Conference will be held in Atlanta on 17–20 May 2020.



Daniel Brocklebank, CFA, had a warning for the audience at the 72nd CFA Institute Annual Conference: Bad incentives lead to bad results. In investment management, compounding bad results can be catastrophic.

Brocklebank, who is UK director of Orbis Investments, began his presentation by telling the story of the cobra effect. It’s a lesson in policy gone wrong, where a reward placed on dead cobras drove people to breed venomous snakes for profit. The moral is that people respond to incentives.

With that in mind, he suggested that it was worth considering the incentives affecting asset manager behavior. Read More

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Build the Perfect Financial Services CV with these 11 Resume Tips

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The Perfect Financial Services CV: 11 Resume Tips

Does your curriculum vitae (CV) pass the six-second test?

When they look at applicants’ resumes, recruiters and hiring managers will spend six seconds on average looking at each. If your CV doesn’t set you apart in that brief moment, you are likely out of luck.

How can you craft a financial services resume that aces that test?
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Deborah Fuhr Discusses the Growth of ETFs

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The CFA Institute Annual Conference is an unrivaled opportunity to access high-quality, unbiased educational content that equips investment professionals with the latest thinking on critical industry issues. The 73rd CFA Institute Annual Conference will be held in Atlanta on 17–20 May 2020.



Institutional investors are increasingly moving into exchange-traded funds (ETFs) and other exchange-traded products (ETPs), and market volatility is one of the main drivers of demand. A BlackRock-sponsored study, conducted by Greenwich Associates, found that institutional investors held 25% of their assets, on average, in ETFs last year. It’s an increase from the 19% reported in 2017.

At the 72nd CFA Institute Annual Conference, hosted by CFA Society of the UK, the rise of the asset class was tracked by Deborah Fuhr, managing partner and co-founder of ETFGI. Fuhr offered a historical perspective and made projections for the future; she expects the ETF/ETP industry to increase to US$8.9 trillion in 2020 and US$22.3 trillion in 2025. Read More

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