CFA Conference: Post Compendium

CFAI have been live-blogging at the 67th CFA Institute Annual Conference here in Seattle. As before, I have been very gratified at the kind reception they have received. This post will act as a compendium of these posts so that you may find them in one convenient location. Links to the posts are provided below, with the most recent listed first.

CFA Conference: Nate Silver

CFAThe Signal and The Noise

Moderated by Diane Brady, Bloomberg Businessweek

Nate Silver runs the political website FiveThirtyEight.com, where he publishes a running forecast of current elections and hot-button issues. Formerly published in The New York Times and recently relaunched in partnership with ESPN, FiveThirtyEight.com has made Mr. Silver the public face of statistical analysis and political forecasting. His latest book is titled The Signal and The Noise: Why Most Predictions Fail—But Some Don’t. Before coming to politics, Mr. Silver established his credentials as an analyst of baseball statistics, developing a widely acclaimed system that predicts player performance, career development, and seasonal winners and losers. He has written for ESPN.com, Sports Illustrated, Slate, and the New York Times. Mr. Silver received his BA in economics from the University of Chicago.

  • Overfitting: The reason noise is mistaken for signal
  • Closing the gap between what we know and what we think we know: One giant Bayesian leap—and some small steps—forward
  • Improving forecasts and models: Think probabilistically, stop and smell the data, know your biases, and add a dose of humility

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CFA Conference: Clifford S. Asness

CFA21st Century Asset Management

Moderated by Brendan Conway, Barron’s

Clifford S. Asness (@Cimmerian999) is co-founder, managing principal, and chief investment officer at AQR Capital Management. Prior to co-founding AQR Capital Management, he was a managing director and director of quantitative research for the asset management division of Goldman, Sachs & Co. Mr. Asness serves on the editorial board of the Journal of Portfolio Management, the governing board of the Courant Institute of Mathematical Finance at NYU, the board of directors of Q-Group, and the board of the International Rescue Committee. He received a BS in economics from the Wharton School, a BS in engineering from the Moore School of Electrical Engineering at the University of Pennsylvania, and an MBA and a PhD in finance from the University of Chicago.

  • Trends that are likely to transform the investment industry
  • Steps that firms need to take to be relevant in the future, and constraints we will never be able to do anything about
  • Skills that investment professionals, firms, and clients will need to thrive in the next 20 years:
    • Developing a better understanding of risk
    • Making judgments and a constant philosophy equal to data
    • Offering hedge funds that hedge
    • Recalibrating fees  Continue reading

CFA Conference: Ann Pettifor

CFACentral Banking, State Capitalism, and the Future of the Monetary System

Moderated by James Benoit, CFA, AfrAsia Bank Ltd.

Ann Pettifor is the director of Policy Research in Macroeconomics (PRIME) and an honorary research fellow at the Political Economy Research Centre of City University, London. She is also a fellow of the New Economics Foundation. Ms. Pettifor was one of the leaders in Jubilee 2000, a campaign that succeeded in writing off $100 billion of debt owed by 42 of the poorest countries. She is the author of Real World Economic Outlook, The Coming First World Debt Crisis, and Just Money: How Society Can Break the Despotic Power of Finance.

  • The fallacy of easy money: Are central bankers trying to solve long-term problems with short-term solutions, and what might be the ramifications of their strategy?
  • The limits of credit expansion: Is ever-increasing sovereign debt a recipe for disaster or essential for global prosperity and stability?
  • Structural imbalances in global economics: How long can they persist, and can they be reduced without triggering a monetary crisis?

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CFA Conference: Nicholas C. Barberis

CFABehavioral Finance: Core Principles and Practical Applications

Moderated by Jason Voss (@TheIntuitInvest), CFA, CFA Institute

Nicholas C. Barberis is the Stephen and Camille Schramm Professor of Finance at the Yale School of Management, where he is a researcher in the field of behavioral finance. Prior to his appointment at Yale, he taught for several years at the University of Chicago’s Booth School of Business. Mr. Barberis has won the Paul A. Samuelson Prize for outstanding research and the FAME Research Prize. He received his bachelor’s degree in mathematics from Cambridge University and his PhD in business economics from Harvard University.

  • Behavioral finance argues that a better understanding of human psychology—in particular, that market participants are not always rational—can improve financial decision making
  • This session will present an overview of the current state of the field, with an emphasis on the past decade but including some speculation about the most promising directions for the next decade
  • Behavioral finance is not a minor supplement to the traditional finance paradigm but, rather, an essential framework for understanding many of the most important financial phenomena

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CFA Conference: Tomáš Sedláček

CFAThe Economics of Good and Evil

Moderated by Attila Koksal, CFA, Unlu Securities

Tomáš Sedláček is the chief macroeconomic strategist at ČSOB, the largest Czech bank. He also lectures at Charles University and is a member of the National Economic Council in Prague. Previously, Dr. Sedláček worked as an adviser to Czech president Václav Havel. He is the author of Economics of Good and Evil and a regular columnist and radio and TV commentator. Dr. Sedláček holds a PhDr. from Charles University.

Key issues follow.

  • What is economics, and what is its crucial role in and broader responsibility to society?
  • How have stories and narrative shaped economic theory?
  • Why does studying the history of thought help us get rid of the intellectual brainwashing of the age, see through the intellectual fashion of the day, and take a couple of steps back?
  • What is the truth that only appears in financial crises, and how do we address the need to counterbalance today’s mainstream approaches to economics?

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CFA Conference: Arjun Divecha

CFAManaging the Emerging Market Portfolio

Moderated by George R. Hoguet, CFA, State Street Global Advisors

Arjun Divecha is chairman of GMO’s board of directors, where he is responsible for overseeing the team managing the GMO Emerging Markets Strategy, GMO Emerging Countries Strategy, and GMO Emerging Illiquid Strategy. Previously, he was at BARRA, directing software development, marketing, and emerging markets research and development. Mr. Divecha holds a bachelor of technology in aeronautical engineering from the Indian Institute of Technology Bombay and an MBA in finance from Cornell University.

Key issues:

  • Asset allocation across emerging market countries and sectors: The search for profitability
  • Promising country/sector combinations: How to identify them
  • Strategies to exploit the emerging market demographic shift: The sweet spot in long-term global demand growth

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CFA Conference: Clint R. Laurent

CFATomorrow’s World: What Today’s Global Demographic Trends Mean for Asia and the Global Economy Moderated by Richard Brandweiner, CFA, First State Super Clint R. Laurent is CEO and founder of Global Demographics Ltd and director at Global Demographics Healthcare Ltd. He is an analyst of and commentator on global population and socioeconomic trends and their impact on the world economy. Dr. Laurent is an experienced adviser to multinational businesses and a frequent speaker at conferences. He is also the author of Tomorrow’s World: A Look at the Demographic and Socioeconomic Structure of the World in 2032. Previously, Dr. Laurent founded Asian Demographics, which transformed into Global Demographics as the firm’s geographical coverage increased. He has also worked at Hong Kong University and as a director at PricewaterhouseCoopers. Dr. Laurent holds a master’s degree in business from Victoria University of Wellington and a PhD in marketing and statistics from Bath University.

Key issues follow.

  • The changing age profile of populations means that traditional market segments (such as young, emerging, middle class) are no longer the growth markets
  • New country/age/income segments will be the opportunities of the next decade
  • Ways the new China will develop—with slower growth but higher consumer spending

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CFA Conference: C. Thomas Howard

CFABehavioral Portfolio Management: A New Paradigm for Managing Investment Portfolios

Moderated by Craig D. Senyk, CFA, Mawer Investment Management

C. Thomas Howard is CEO, director of research, chief investment officer, and co-founder at AthenaInvest, a US SEC–registered investment adviser. He led the research project that resulted in strategy-based investing, the methodology that underlies AthenaInvest’s investment approach. Dr. Howard oversees Athena’s ongoing research, which has led to a number of industry publications and conference presentations. He is also professor emeritus at the Reiman School of Finance at the Daniels College of Business at the University of Denver. Previously, Dr. Howard lectured at SDA Bocconi School of Management, Handelshøjskole Syd, and École de Management de Lyon. He has also served as a consultant for a number of firms, including First Data Corp and Janus Capital Group, and served on the board of directors at AMG National Trust Bank. Dr. Howard holds a BS in mechanical engineering from the University of Idaho, an MS in management science from Oregon State University, and a PhD in finance from the University of Washington.

Issues include the following.

  • Measurable and persistent behavioral factors are emerging as a new source of information with the potential to transform how we think about portfolio management and to dramatically improve portfolio performance
  • Behavioral portfolio management (BPM) is the next step in a developing paradigm shift away from modern portfolio theory and toward behavioral finance
  • BPM looks beyond investors’ cognitive errors and focuses on how to harness price distortions driven by emotional crowds to create superior portfolios

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CFA Conference: Jeffrey C. Scott

CFAOptimization, Valuation, Diversification, and Risk in Constructing Global Portfolios

Moderated by Harin de Silva, CFA, Analytic Investors, LLC

Jeffrey C. Scott, CFA, is chief investment officer at Wurts & Associates, where he is also head of the firm’s discretionary asset management division. Previously, he served as chief investment officer at the Alaska Permanent Fund, where he led the fund in adopting a risk-factor approach to asset allocation and in developing a risk-based investment policy. Institutional Investor awarded Mr. Scott the 2011 Outstanding Industry Contribution Award for the hedge fund industry. He has also worked as an assistant treasurer at Microsoft Corporation. Mr. Scott is a member of the long-term investor council of the World Economic Forum and served as a visiting scholar for Stanford University’s Collaboratory for Research on Global Projects. He holds a bachelor’s degree in finance from the University of Idaho and an MBA from Central Michigan University.

Key questions:

  • “Allocating to risks” and positioning client portfolios to weather an uncertain macro environment
  • Stress testing portfolios and enhancing diversification based on economic regimes
  • Improving governance, manager selection, and perspectives on risk

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