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Friday 26 May 2017

Specialist, independent investment continuing education & certification for portfolio construction practitioners

This week, we bring you the third and final installment of Dr Woody Brock's review of the three key risks facing investors - this time, it's financial market risk, and Woody concludes that while US stock market risk has declined modestly in the last 80 years, risk stemming from market mistakes and, possibly, from irrationality has risen significantly. Tim Farrelly then shows that despite their critics, the ratings agencies do a wonderful job of assessing companies. Urban Carmel then debunks the myth that indexing is a threat to market stability (a point that Woody also touches on). Yale's Stephen Roach looks at the implications (and the irony) of China's new global push. And we feature Jeremy Lawson's excellent Markets Summit presentation on the "dire" implications for risk assets of the rising wave of populism.
All the best for another week's continuing education - Graham
. Join us for PortfolioConstruction Forum Masterclass NZ (22 June, Auckland) - best suited to senior practitioners in a discretionary role that includes secondary fund research and building multi-manager, multi-asset portfolios. Register today!


"The capacity to learn is a gift; the ability to learn is a skill; the willingness to learn is a choice" - Brian Herbert (author)


The dramatic decline of risk - part 3 - Financial market risks
Overall stock market risk has declined modestly in the last 80 years, but the nature of risk has changed greatly. The risk stemming from market mistakes and, possibly, from irrationality has risen significantly.
Dr Woody Brock, SED |
White Paper

What the ratings agencies are really good at
After the ratings failures of CDOs and other complex instruments in the GFC, many dismiss the work of the ratings agencies. But far from being hopeless, they do a wonderful job of assessing companies.
Tim Farrelly, farrelly's |

Markets | Investing
The worry about indexing is overblown
The number of indexes has exploded and now exceeds the number of stocks in the US. But overall, the US stock market is still dominated by active management. And 96% of index products are of insignificant size.
Urban Carmel, The Fat Pitch |

Rethinking the Next China
China is upping the ante on its connection to an increasingly integrated world, running against the grain of the populist anti-globalisation backlash that is brewing in many developed countries.
Stephen Roach, Yale University |

Markets | Investing
Populist discontent spells danger for markets
Governments must find a way to reconcile open markets with more evenly distributed income growth, or globalisation may reverse with dire implications for risk assets.
Jeremy Lawson, Standard Life Investments | 0.50 CE |

The winds of change are stronger than you think: Q+A
Without more transparency in terms of the form protectionism might take, it is difficult to pinpoint specific sectors or stocks that would benefit from such an environment...
Ron Temple, Lazard Asset Management
| Comment

Go Short!
1. The US is not a good proxy for the rest of the world. 2. Shorting is a fundamentally difficult strategy. Even if an asset is massively overvalued - and US equities are not - shorting is dangerous...
Tim Farrelly, farrelly's
| Comment


The dramatic decline of risk - part 2 - geopolitical risk
Despite increasing global political risk, the probability of outright war is paradoxically lower than it might have been at any previous period in history.
Dr Woody Brock, SED |
White Paper

Whistling past the geopolitical graveyard
In the face of proliferating geopolitical risks, global financial markets have reached new heights. Markets have trouble pricing "black swan" events, the "unknown unknowns" that are unlikely, but extremely costly.
Nouriel Roubini, Roubini Global Economics |

A Trump slump?
Trump's election triggered a global stock market upswing, on confidence that he would be able to fulfill his pledge to reignite US economic growth. But how much is Trump really likely to be able to get done?
Libby Cantrill, PIMCO |

Research Review: Factor investing
Factor investing has its foundation in the empirical studies of EMH. Via ETFs, we now live in a world where the possibility of factor investing is available to almost everyone. Three recent papers are useful in exploring further.
Prof Ron Bird, UTS |

Buy Low, Sell High sounds simple but clients need a framework
Clients benefit from understanding the investment journey. Having prepared responses to scenarios improves the chance of success.
Douglas Isles, Platinum Asset Management
| 0.25 CE | 2 comments | Resources
* Rated in the top 3 presentations by Finology Summit 2017 delegates

What stocks are yield-based but not heavily geared?
Yield is obviously just the proportion of profits which a company chooses to return as dividends. In general, the higher the proportion, the more a company is likely to be sacrificing future growth...
Martin Conlon, Schroders
| Comment

Are assets overvalued
Low interest rates will only cause over-valuation if they are unnaturally low..
Tim Farrelly, farrelly's
| Comment


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