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10 posts from November 2013


CFA Topic Deep Dive: Your Guide to Understanding Diversification

CFA Exam PrepIn prepping for your CFA® exams, one of the most frustrating things that can happen is that your mind simply refuses to grasp a particular concept. Often, you may be forced into blind memorization out of desperation.

The purpose of the CFA Topic Deep Dive articles is to help you understand certain CFA concepts. By going into deep detail on a particular example, you'll learn all the nuances about each topic and go into your CFA prep (and exams) better prepared.

We'd love your feedback on this series, so let your views be known in the comments below. For this article, Miguel and Mykola from Financial Analyst Warrior take us through a detailed example of diversification.

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This article was reposted with permission from 300 Hours, a site dedicated to CFA candidates and charterholders.

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Book Review: Making It Happen

Making-it-Happen"Make it happen" was the advertising slogan of Royal Bank of Scotland, RBS. It expressed the optimistic aggression of RBS which grew from its 1727 founding and long history of prudent banking to being the largest bank in the world just before its collapse during the 2008 financial crisis. The author of Making It Happen, Iain Martin, has written one the best accounts of a bank that rode the credit bubble over the edge. The book is clearly written and organized, and brings in the wider political and cultural context. Martin interviewed over 100 individuals, many of whom were former RBS bankers, all off the record. He concluded this group had "at best a partial understanding of the businesses that made them so much money."

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The Six Personality Traits of a Successful Wall Street Trader


Goldman Sachs traders posted losses on just six days during the second quarter. They booked more than $100 million in profits in 10 days. Needless to say, there’s plenty of money to be made as a Wall Street trader. Plenty of stress too.

If you want to be a successful trader on Wall Street, you better be highly intelligent and have an inspiring work ethic. You also need to have a certain personality – strong, fearless but also humble. Here are the six traits you’ll need if you want to make it.

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My Big Newsletter Mistake’s Lesson for You

When’s the best day and time to send your e-newsletters? My January mistake upset my beliefs about this topic.

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Recent Research: Highlights from November 2013

"Are Risk-Parity Managers at Risk Parity?"
The Journal of Portfolio Management (Fall 2013)
Edward Qian

Risk parity has become an accepted investment strategy, to some degree. Its main advantage is its use of risk allocation, as opposed to the capital allocation used by the traditional asset allocation approach. A balanced risk allocation provides true diversification; therefore risk parity should deliver better risk-adjusted return over time. Despite the acceptance and the fact that the term “risk parity” has been in use for almost ten years, the investment community seems confused about risk parity’s true definition. Is it just a quantitative risk-budgeting technique? Is it about operational leverage? Or is it about high exposures to fixed income and low exposures to equities? In this paper, the author aims to define the principle of risk parity investing. He then examines a sample of risk parity managers, using the return-based style analysis pioneered by William Sharpe. The results show that, according to the defined principle, a number of risk parity managers in our sample are not using true risk parity.

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Writing Investment Research Reports: Elements of Style

The security analyst profession is changing, and that's because your clients' needs are changing. Clients today are more demanding than ever. They want useful information, and they want it now. They want your report's recommendations in a clear, concise, and compelling style. They want information that's logically presented and easy to understand.

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Book Review: The Federal Reserve and the Financial Crisis


Adapted from four lectures given by Ben Bernanke in March 2012, this book is a good primer on the workings of the central bank throughout its history, including its role in the recent financial crisis.

It is fitting that The Federal Reserve and the Financial Crisis should be published in the centennial year of the institution. Adapted from a series of four lectures given by Ben Bernanke at George Washington University in March 2012, the book is a good primer on the workings of the central bank throughout its history, including its role in the recent financial crisis. Concepts are introduced with clarity, and the prose is straightforward. The book is appropriate for students of central banking, and experienced readers will find it a worthwhile account of the historical record for what it both does and does not reveal.

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Should I Study for the CFA® Exam on My Own?


This question comes up often among candidates sitting for the CFA® exams.  

The answer is simple:  NO!

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Behold the Growing Job Sector Where Investment Banks Are Actually Hiring


If you’re an experienced banker in debt capital markets, you might want to send your CV to a regional bank in Asia.

With investment banking recruitment still stuck in the doldrums globally, DCM in Singapore and Hong Kong is providing a welcome wave of hiring, fueled by an active market.

DCM revenue in Asia Pacific hit $3.0bn in the first nine months of this year, accounting for a record 34% of IB revenue in the region, significantly above the 22% average over the past 10 comparable periods, according to figures from Dealogic.

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NYSSA Announces December 2013 CFA Scholarship Winners

The New York Society of Security Analysts (NYSSA) is pleased to announce the winners of the December 2013 CFA® Exam Scholarship Program. NYSSA offers up to five scholarships in both the fall and spring to New York–area CFA candidates. Recipients are selected based on experience and/or interest in the investment profession, ethical standards, and commitment to NYSSA and CFA Institute. Scholarship winners receive discounted registration fees and free NYSSA CFA weekly review.


Aleks FLTC 653[1] Aleksandra Pacholek, a CFA Level I Candidate, has worked in the finance industry for approximately seven years. She began her career in emerging market project finance and structured finance as an intern at the Overseas Private Investment Corporation. Subsequently, she switched over to the equity side and spent a year in equity research at FBR Capital Markets. Most recently, she spent five years with Commerzbank, a large European bank, focusing primarily on the loan markets in various roles ranging from Credit to Relationship Management. Having spent her career as a product specialist, she recently joined one of her former portfolio companies, where she is director of corporate financial affairs at Genting Americas Inc, a top player in the global Gaming Leisure & Lodging industry. She is now very broadly focused, primarily on capital raising and bank/investor relations. “The depth and breadth of knowledge covered by the CFA is a necessary toolkit, which will enable me to succeed in my current position,” Pacholek said. She graduated with honors from the George Washington University with a Bachelor’s in International Affairs and Economics, and holds a master’s in International Economic and Investment Policy from George Washington University.

Wirthumer_PortraitPeter Wirthumer studies International Political Economy and Development (IPED) at Fordham University as Fulbright Scholar from Austria. He received his first master’s degree with distinction in Mathematics with Applications in Economics from the Technical University of Vienna, Austria. He has outstanding international experiences, including having lived in France and Uzbekistan. Lately he worked as a Project Management Assistant for the top German financial consulting firm zeb/rolfes.schierenboeck.associates, implementing Basel III regulations for a major Austrian bank. This experience, paired with personal ambitions, motivated Peter to pursue the Charter in order to get a better understanding of financial markets, research and regulations. In the future, he wants to pursue either a career in Management Consulting or International Organizations. Peter joined NYSSA as he regards it as a highly good opportunity not only for networking, but also for personal and professional development.

Photo_M.KruminsMaris Krumins graduated with honors from the University of Latvia in Riga where he studied international business. During his studies, Krumins gained international experience by participating in exchange programs in France and the US. Maris started his professional career at Nordea Bank Finland Plc. Upon completion of the Bachelor's program he started to work for the Ministry of Economics where he was responsible for managing European Union Funds. During the summer of 2013, he interned with the Permanent Mission of the Republic of Latvia to the United Nations. In 2012 Krumins was awarded a Fulbright Scholarship and he started his Master’s degree in Economics & Finance at Fordham University. In 2013 he received the Baltic-American Freedom Foundation Scholarship to continue his studies at Fordham University. "I am determined to obtain [the] CFA designation as I believe it can improve my overall knowledge in finance, as well as provide a quality mark on my competencies and expose me to other finance industry professionals," Krumins said.

Oates1Kevin C. Oates is a Dealer Relationship Representative at Andrews Federal Credit Union in Wiesbaden, Germany. Kevin holds a Bachelor of Science degree in Business Administration with a concentration in International Business, summa cum laude, from the Sorrell College of Business at Troy University (2012), and is currently pursuing his Master's in Security Analysis and Portfolio Management with Creighton University. Kevin intends to successfully complete the Master’s in Security Analysis and Portfolio Management as well as a Chartered Financial Analyst charter in order to represent the New York Society of Security Analysts as well as CFA Institute in the international investment field. His long term goal is to become a portfolio manager of an equity mutual fund. He wants to achieve the CFA Charter in order to be equipped with the tools necessary to start a successful career in equity research, and furthermore to earn credibility while adhering to the highest standards of integrity, ethics, and professional excellence. 


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