In this edition of Friday Career Coffee, "Using Your Online Presence: Strategies for Career Advancement," Shelly Palmer gives invaluable advice regarding creating, shaping, and maintaining a strong, healthy online presence. In the brave new world of social media and web 2.0, a carefully maintained online presence is just as important as a tidy physical appearance. Palmer has strategies for users of Facebook, LinkedIn, Twitter, and everything in between. In the clip below, Palmer explains how to get the most out of your LinkedIn.
If you like what you hear, the full audio of the event is available on NYSSA's On-Demand website.
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Edward Stavetski’s Managing Hedge Fund Managers provides a thorough analysis of the factors to be considered when investing in hedge funds. The book is particularly relevant now, at a time when less capital (due to deleveraging and redemptions) is chasing more alpha (due to market dislocations), making the hedge fund space more attractive. It is all the more compelling in our post-Madoff environment, as due diligence gains new significance, and investors are forced to play detectives.
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The financial services sector is caught in a death waltz, spun around by bad loans, trapped in the embrace of plunging stock prices, and dizzied by embarrassing scandals. And like Hans Christian Andersen’s little girl with the red shoes, it’s driven to keep on dancing. Nearly a trillion dollars in government bailouts have sunk almost without a trace, leaving global stakeholders desperate to stop the music.
What kind of future can possibly be in store for us? Chastened executives may wince at the thought of government regulators and outside forces reshaping the industry, but transformation is by now a foregone conclusion. The only questions are what types of institutions will live to see another sunrise, and what attributes executives must cultivate to ensure that their companies are among those that endure.
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When it comes to the causes of the current financial crisis, Restoring Financial Stability
(also known as the “NYU Stern Report”) takes a multifaceted perspective. The book features 18 papers, written by 33 New York University and NYU Stern faculty members. Taken together, the papers give a system-wide context for the meltdown and offer insights into the role played by market participants—banks, the shadow banking system, rating agencies, regulators, and government. Each paper also suggests reforms intended to minimize the possibility of similar future crises.
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The most dramatic financial meltdown since the Great Depression occurred despite recent advances in risk management techniques. Because of a fervent but unfounded belief in some quarters that VaR (value at risk) measures worst-case scenarios, financial institutions were exposed to crippling losses when VaR models failed to anticipate the extent of potential price movements, in some cases by whole orders of magnitude.
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Where can I, as a securities analyst or portfolio manager, gain access to free, consistent, and reliable data on sector-based environmental performance that avoid the current limits of voluntary company reporting?
This question was central to a session entitled “Dialogue to Explore the Use of EPA Data in Financial and Investment Analysis,” held in New York City on June 19, 2008. The invitation to the meeting, which attracted 85 participants drawn in large part from the financial-services industry, was jointly issued by the New York Society of Security Analysts, Inc. (NYSSA), and the US EPA (Environmental Protection Agency) Region 2 (which includes New York). The meeting was part of the EPA’s National Dialogue on Access to Environmental Information, an attempt to cope with the increasing demand for environmental information from numerous professional sectors, including community leaders, academics, and the financial sector.
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How to formulate an effective equity investment strategy in today’s uncertain market will be the topic of an upcoming NYSSA Market Forecast seminar. Merrill Lynch’s Head of U.S. Quantitative Strategy, Savita Subramanian, who will be a featured speaker at the luncheon, maintains that companies with “high-quality” dividend yields are particularly prudent picks in this environment, and that quantitative screening can enable investors to distinguish the “good” dividend plays from the “bad.”
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What went wrong? The hedge fund industry had seen tremendous growth in the last decade with assets coming close to three trillion dollars. Hedge fund managers were the kingpins of the investment world—but in 2008, the industry collapsed. Only one in five hedge funds had a positive year, more than 1,400 hedge funds closed, and investors were clamoring for the doors. In Hedge Funds Humbled, Trevor Ganshaw, a partner at a multistrategy hedge fund in New York City, explores the reasons for the dramatic turn of events and describes an industry definitely in need of some humbling.
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Our research questions whether all aspects of responsible investing are equally important for stock analysis. Can the different aspects of ESG performance—that is, performance in environmental and social sectors and corporate governance, as well as operations in “sin” areas—be combined for stock analysis? Our research is geared toward investment practitioners, and we therefore concentrate on stock returns (the main parameter affecting the performance of investment managers) and ROE (return on equity, which is arguably the most important parameter of corporate performance and stock quality).
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Christine S. Richard's new book, Confidence Game, tells the controversial story of how hedge fund operator Bill Ackman shorted municipal bond insurer MBIA. The short selling was done with credit default swaps, and the ultimate profit for his Pershing Square Capital Management was $1.1 billion. The controversy arose from first shorting the stock, then issuing a negative research report. Ackman engaged in what the book describes as “perhaps the most aggressive 'short' campaign in Wall Street history.”
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"Index Volatility in Perspective" The Journal of Index Investing (Summer 2010). Joanne M. Hill.
As the number of indexes and index-based investment products expands, it is critical for investors to understand relative index volatility. This article discusses the issues to consider when evaluating index risk and shares insights and data from the author’s recent historical index volatility analysis. The research evaluates the risk of index exposure from multiple perspectives—over time and on a relative basis—and encompasses U.S. equity, global equity, U.S. sector, U.S. Treasury, and select commodity market indexes. Specifically, the author explores how time dimension affects perception and assessment of risk, the cyclicality of volatility measures, patterns that may signal a future shift in risk, how index volatility measures trend compared to index return measures, and how index volatility behaves above and below the median, as well as under increasing levels of risk. Based on this research, the author shares several important insights, including the observation that risk can suddenly shift well above median levels for a given index, and those shifts often occur simultaneously across multiple indexes. As a result, significant short-term value changes may occur if portfolios are not modified to reduce risk when the inherent volatility of indexes rises. Alternatively, heightened risk may also present tactical investment opportunities for investors who have an ability to anticipate directional index moves.
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“Heilig-Meyers: From AAA to Junk Bond”
“CDO Ratings Are Whacked by Moody’s—AAA to Junk in a Day Raises More Questions about Credit Agencies”
The first of these headlines appeared from Credit Card Management in 2001, and announced the collapse of what was then one of the largest American furniture retailers. The origins of that collapse lie in the late 1990s, when Heilig-Meyers began to service its own debt. As much as 75% of its sales were made with two-year installment loans.
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With the implementation of TARP (Troubled Asset Relief Program) and the passage of ARRA (American Recovery and Reinvestment Act of 2009), the federal government has pledged to rebuild the United States, both literally and figuratively. Some of the methods President Barack Obama’s administration will employ to revive the economy include monetary support for financial institutions, bringing liquidity back to the credit markets, and creating jobs by reconstructing aging infrastructure. Traditionally, the funding for these tremendously expensive fiscal policies has come either from increased taxes, or from municipalities borrowing money by issuing municipal bonds, or munis.
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Cass Sunstein writes, “The economic crisis that began in 2008 was a product, in significant part, of a form of group polarization, in which skeptics about the real estate bubble, armed with statistical evidence, did not receive a fair hearing or were in a sense silenced.” This raises a couple of immediate questions. For example, how do group dynamics influence individual and group (that is, market) decisions? What can astute investors or financial decision makers learn from Sunstein that will improve the way they process information and arrive at conclusions?
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