< The Finance Professionals' Post: July 2012

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19 posts from July 2012


Investing in High-Tech in Russia, Part I: From Italy with Love...for Russia

In June 2011, I attended the 18th annual conference of the Multinational Finance Society. My hotel, located in a prosperous section of Rome, did not have hot water running, and the air conditioning didn’t work—conditions that seemed incongruous with the surroundings. But I was pleased to discover that the TV had 20 international channels, including five Russian ones, two Chinese, and several Arabic. I found the most interesting channel to be Bloomberg Europe, where I caught a conversation about investment in Russia.

Discussions about investment in Russia usually center on oil and gas, but the leader of the Bloomberg panel shifted the subject to high tech. While “Russian high tech” seems like an oxymoron thanks to our mainstream media, the perceptions of Russian high tech, and of Russian markets in general, are very different from reality.

Continue reading "Investing in High-Tech in Russia, Part I: From Italy with Love...for Russia" »


Five Tips for Beating Writer's Block

As I tell the clients I coach, and the MBA students I teach, "Please just delete the term ‘writer's block’ from your vocabulary." However, let's be realistic: Even seasoned, professional investment report writers have moments of panic as they sit and stare at a blank computer screen. Here are some tips for you to avoid those feelings.

Continue reading "Five Tips for Beating Writer's Block" »


Black Swan Events: No Longer a Rarity

Vinny Catalano, president and global investment strategist with Blue Marble Capital Management, is on a mission to heighten investment professionals’ awareness of the impact that black swan events and other hard-to-quantify and predict “big picture” phenomena are likely to have on market behavior in the 21st century. He reports investment analysts need to get comfortable navigating the uncharted waters where the black swan lurks. Catalano will be moderating NYSSA’s upcoming Market Forecast™: Are We There Yet? conference on August 9.

Continue reading "Black Swan Events: No Longer a Rarity" »


Blogs for the Buyside: Boiling Frogs

Blogs for the Buyside

There is an old parable about a boiling frog. If one is put directly into boiling water, the frog will perceive the danger and jump out. But if put in room-temperature water that is gradually heated, the frog won’t perceive the change in temperature and will just stay in the water until its death.

It is a common way to explain to people that they need to monitor gradual changes as well as severe ones.

Boilingfrogs.info does a great job tracking the stories that seemingly got dropped off your Bloomberg scroll but still can burn your portfolio.

Continue reading "Blogs for the Buyside: Boiling Frogs" »


Everything You Could Possibly Want to Know about the CFA Results


In the run up to today’s results from the June CFA® exams, you might find it useful to have some quick FAQs covering some of the questions most asked by candidates.


Simply put, the MPS is the score you have to match or beat in order to pass. If you come in at anything below this score it’s a case of good try, come back again next year. The MPS is never known externally—but chances are it has a maximum of around 70 percent.

Continue reading "Everything You Could Possibly Want to Know about the CFA Results" »


Limericks Économiques: Day of LIBOR Reckoning

Limericks Économiques

Though collusion on rate executions
Was the norm in finance institutions,
When the tide quickly turned
Many bank traders learned
They would naturally face prosecutions.

Continue reading "Limericks Économiques: Day of LIBOR Reckoning" »

Video: The Secrets to Becoming a Master Networker

There is far more to networking than asking people for their contact information. A great networker must have the ability to draw people to them and sustain relationships in a way that creates new opportunities. No one knows this better than "master networker,"  Jeffrey Meshel, author of One Phone Call Away: Secrets of a Master Networker. As the founder and CEO of three successful companies, Meshel reviews how great networking can open doors in the least expected places.

Important Tips:

  • When you know people, it is important to share and introduce them. If you are a catalyst in putting people together, possibilities arise. Generosity will come back to you.
  • Create a database of people you know that not only includes contact information, but also facts about these people (i.e., hobbies). A database is useless if you do not remember anything about your contacts.
  • If someone asks you about yourself, answer passionately in a way that can lead to more discussion. One word answers will not get you that contact.
  • Conversely, if you are approaching someone, ask them about their passions as a way to engage them. Getting below the surface will increase the likelihood of creating a lasting relationship.


You Got Your CFA® Charter. Now What?

If you find out next month that you passed the Level III CFA® exam in June, there is good news and bad news. The good news is that, unlike 57% of the people taking all levels of the CFA exam in June 2011, you passed and have obtained your CFA charter. The bad news is that new charterholders face an uncertain economy and uneven job prospects, with an unemployment rate over 8% since February 2009.

Many financial companies are using a wait-and-see attitude towards expanding their workforce. So what comes next for the CFA charterholder about to enter a tough job market?

Continue reading "You Got Your CFA® Charter. Now What?" »


Video: What to Say When Networking (without Scaring People Away)

In the professional world, we often hear about the importance of networking, but not much about which questions to ask. Contrary to popular belief, networking is not about asking for jobs; it is a process of building beneficial relationships that can help advance your career. Career coach Win Sheffield shares conversation tips and helpful sample questions to use in a networking situation.

Networking conversation tips:

  • In an interview, you want to present yourself as someone who knows all the answers; in a networking situation, it's just the opposite. You're asking the questions.
  • You want to ask anything but for a job or people who know of a job. It puts too much pressure on the other person and they probably already know that you're looking for opportunities.
  • Great sample questions:
    1. How did you get started?
    2. What has been your experience in the industry?
    3. How are things done in your firm?
    4. How have you dealt with... (a specific issue in industry)?
  • Networking is a great way to keep up with your industry or learn more about the industry you want to get into.


Which Level I CFA® Exam Should You Take—December or June?

CFA San Francisco

On the surface, it sounds like a no-brainer. Starting with the December Level I exam shaves six months off the time needed to take all three exams, right? Yes, in theory that’s trueif you pass all three on the first try. But let’s dive into this a bit more so you know what you’re against if you decide on this route.

Continue reading "Which Level I CFA® Exam Should You Take—December or June? " »


Structuring Your Summer Job Search


The old saying that looking for a job is a full-time gig may sound cliché, but it’s true—which means you’ve got to have a plan and you can’t afford to take the summer off.

“A structured job search plan will keep you focused, motivated, and activity-centric in helping you achieve your targeted goal of finding a new job while you are either employed or unemployed,” Jayne Mattson, a senior vice president at Keystone Associates, a career management company, tells eFinancialCareers.

Continue reading "Structuring Your Summer Job Search" »


Book Review: Every Nation for Itself


The daily headlines of financial stress and possible disaster in the eurozone are a graphic scene of a breakdown in the European countries' ability to come together in a solution. Some see the same type of political paralysis and institutional dysfunction in the failure of the US Congress to address our fiscal debt challenge. The full parameters and impact of this increasingly fragmented world is spelled out in Ian Bremmer's new book, Every Nation for Itself: Winners and Losers in a G-Zero World.

The "G-Zero World" that Bremmer describes is "a world order in which no single country or durable alliance of countries can meet the challenge of global leadership." The G7 and G20 groups are viewed as ineffective. We are in a period of uncertain transition, in which "for the first time in several decades, we live in a world without global leadership." The result is more volatility, uncertainty, turbulence, anxiety, and risk for investors.

Continue reading "Book Review: Every Nation for Itself" »


A Call to Action

At the start of the first full day of the CFA annual conference, John Rogers issued a challenge to the members of CFA Institute. Rogers, the organization’s CEO, did not mince words.

“Our industry has forgotten what it takes to maintain the trust of clients, regulators, and the public as a whole,” he said. As a result, “Our profession has lost much of its good standing and public respect.” Alas, it has been “a failure of self-control” that has caused the damage.

So now what? According to Rogers, CFA Institute intends to be a bolder voice for reform of the investment industry. He said that finance came to be thought of as an end in itself, to the detriment of the industry, its professionals, and society.

Continue reading "A Call to Action" »


Recent Research: Highlights from July 2012

"Specification Risk and Calibration Effects of a Multifactor Credit Portfolio Model"
The Journal of Fixed Income (Summer 2012)
Gregor Dorfleitner, Matthias Fischer, and Marco Geidosch

This article examines a crucial source of specification risk when calibrating a typical industry-type, Merton-based credit portfolio model. It emerges from the necessity of having to choose a proxy for creditworthiness. In addition to equity prices and asset values, which are the classical choices, the authors consider credit default swap (CDS) spreads and expected default frequencies (EDF, from Moody’s KMV) as alternatives. Based on 40 large European companies from different industries, the authors calibrate a macroeconomic factor model with an OLS regression analysis for each specification and calculate the corresponding economic capital. Eighteen macroeconomic and financial variables are considered as risk factors. Their findings are: a) on average, 2 to 3 risk factors are needed to adequately model creditworthiness on the obligor level, b) stock market variables are the most important risk factors, c) model-implied credit correlation is extremely sensitive to the choice of the proxy for creditworthiness, and d) only the EDF specification leads to less economic capital compared with regulatory capital, according to Basel II, while it is exceeded substantially by all other specifications. In particular, credit correlation in the CDS specification by far exceeds any estimate mentioned in the literature. Most important, the authors show that the economic capital of their sample portfolio can be reduced by 78%, depending on which variable is chosen as a proxy for creditworthiness.

Continue reading "Recent Research: Highlights from July 2012" »


Video: The Outlook for Independent Research

NYSSA hosted a panel of independent research experts who shared their thoughts and opinions on the current challeges facing the industry and where it is headed. The speakers of the panel were Kevin Coleman of Coleman Research Group (CRG), Faye Landes of Consumer Edge Research,  Terry Gardner of ITG Investment Research, and Sanford Bragg of Integrity Research.

Thoughts about the state of independent research:

  • In the last 5 to 10 years, analysis has shifted primarily from  the sell-side to the buy-side.
  • Compensation has decreased.
  • Research faces difficulties at large firms because of a variety of structural and internal factors, possibly creating opportunities for independent firms.
  • The ability to differentiate and provide expertise will uphold the demand for independent research.
  • Independent research goes beyond where the big firms go and is often more innovative. This will also help sustain and grow the industry.
  • After facing the many challenges that lie ahead, independent research will become bigger than it is today.

Is Jamie Dimon’s Business First Class?

JPMorgan CEO Jamie Dimon went before congress again a few weeks ago to make the case for why a $2 billion trading loss was a stupid mistake, not a willful breach of at least the intent of Dodd-Frank. And again our representatives who wrote the law didn't hold him to the standards set by JPMorgan’s own Code of Conduct: following the spirit and intent, not just the letter, of the law.

When Mr. Dimon’s predecessor J.P. Morgan Jr. was called before the Senate in 1933, he spoke humbly of a banker as a member of a long-standing profession for which there had grown a code of ethics and customs, “on the observance of which depend his reputation, his fortune, and his usefulness to the community in which he works.”

Continue reading "Is Jamie Dimon’s Business First Class?" »


Understanding the Demand for Financial Advisors in Wealth Management


The demand for financial advisors is strong, seeming to belie the tumult and layoffs impacting many other finance professionals.

In an exclusive interview with eFinancialCareers, John Hyland, managing partner at Private Advisor Group, the largest branch office at LPL Financial and a growing hybrid registered investment advisor (RIA) firm, speaks about the trend, as well as the role of independent broker-dealer firms.

eFC: You describe Private Advisor Group as a hybrid RIA firm. Can you explain exactly what that means versus a full-fledged RIA? What is it like working for an RIA versus a hybrid RIA?

Continue reading "Understanding the Demand for Financial Advisors in Wealth Management" »


Book Review: Private Empire


Oil companies have always been involved with—and connected to—governments. With the increased globalization of business and finance, this is true of most multinational corporations. Steve Coll's new book is an informative record of one of the most prominent of these corporations: Exxon Mobil. As Coll writes, the company is “one of the most powerful businesses ever produced by American capitalism.” Private Empire: ExxonMobil and American Power is an eye-opening and exposing review of the corporation. The research for the book consisted of over 450 interviews and 800 pages of documents predominantly from the State Department (through use of the Freedom of Information Act), in effect providing the first in-depth examination of Exxon Mobil to date.

Continue reading "Book Review: Private Empire" »


Bad Customer Experience = Bad Investment

Smart analysts pay close attention to how the companies they cover treat customers.

Analysts know that many companies claim they are customer focused, but that’s rhetoric. They understand that a company that ignores what customers want also ignores its bottom line. To properly cover these companies, analysts should conduct a wide-ranging and deep search—including, if possible, interviews—into the customer experience. It’s vital to understanding a company’s financial health.

Today’s customers want choice, convenience, and control. They want to feel in charge, and with growing social media trends, they often are. Because customers can now flock to their computers to ridicule or praise a company’s service and product (note the recent customer backlash against Adidas via Facebook that resulted in their new sneaker line getting pulled from production), companies should pay close attention to their customer’s needs.

Continue reading "Bad Customer Experience = Bad Investment" »


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January 7, 2016

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CFA® Level I 4-Day Boot Camp

Thursday November 12, 2015
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session A Monday

Monday January 11, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session A Wednesday

Wednesday January 13, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level III Weekly Review - Session B Thursday
Thursday January 21, 2016
Instructor: O. Nathan Ronen, CFA

CFA® Level II Weekly Review - Session B Tuesday
Thursday January 26, 2016
Instructor: O. Nathan Ronen, CFA