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PortfolioConstruction Forum


Our regular Forum Fodder email alerts Members to what's new on this site and with our live professional development progams. A sample of the Forum Fodder email is below.  Become a Member (with our compliments) to receive Forum Fodder and access our multi-media learning centre, (this site) featuring:
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 Friday 27 March 2015

The independent professional development service for investment portfolio construction practitioners


Fodder's something of a two horse race this week. First up, we have Greece. Read Oliver Hartwich's entertaining and sobering insight on (in his words) whether the new Greek government is playing a madman strategy in a game of chicken, or whether Tsipras & Co are just barking mad. (It's hard not to conclude the later.) Then check out Charles Dallara's presentation from the recent Markets Summit on whether Greece will be the Eurozone's nemesis. Charles led the team that negotiated Greece's bailout in 2011, no one better understands its latest woes and the impact on the Eurozone.

Louis Gave lightens the mood with his pithy piece on the three ways to make money in financial markets generally, and what investors should buy now, and where.

Angela Ashton adds to our foundation curriculum - a core set of 20 or so research papers we believe every practitioner should read and understand. This latest is on financial ratio analysis - don't tune out - and it's relevant whether you recommend individual stocks, or use equity funds. (Complete the CE quiz to earn 1.25 CE points.)

Back to our two horse race - Fed tightening is the other runner. Bob Gay (who worked at the Fed under arguably it's best chairman, Volker) looks at what "normal" means as the Fed begins to normalise rates. And finally, JP Morgan Asset Management's Dr David Kelly and team complement Bob's piece perfectly with an indepth analysis of the investment implications of the Fed's long journey back to

more normal monetary policy. (Complete the CE quiz to earn another 1.25 CPD points.)

All the best for some great weekend learning! - Graham

P.S. Fodder's taking a break over Easter and will return on 17 April. Meanwhile, we'll let you know by Twitter as usual as we publish papers (follow us @PortfolioForum).


Greece's madmen at work
Hardly a day passes that a Greek government official does not add a needless provocation to the bailout debate. Is this just madness? Or is there method in it?
Oliver Hartwich, The New Zealand Initiative

Greece - a case study for increasing Eurozone strain
2015 will be a year of huge uncertainty about the future of the Euro. These uncertainties are likely to pose a fundamental challenge to investing in the Eurozone.
Charles Dallara, Partners Group
* Rated in the top 5 presentations by Markets Summit 2015

Three regions, three strategies
Fundamentally, there are three ways to make money in financial markets. A well structured and well-diversified portfolio should encompass all three, across geographies.
Louis-Vincent Gave, GaveKal

Financial ratio analysis
Even if it is never your intention to recommend individual stocks, understanding financial analysis - and ratios in particular - will enhance your ability to analyse equity funds.
Angela Ashton, PortfolioConstruction Forum
1.25 CE Research

The end of an era
Now the Fed has opened the door to normalising interest, what constitutes "normal"? Take care in stretching for yield now the Fed is no longer making promises.
Dr Robert Gay, Fenwick Advisers

The investment implications of Fed tightening
After more than six years of near zero interest rates, the Fed appears set to embark upon the long journey back to more normal monetary policy, raising a host of questions about the investment implications.
Dr David Kelly et al,  JP Morgan Asset Management
1.25 CE
White Paper

Member comments

Interesting article... just one query. I thought markets were the consensus view???
Michael Furey

Markets more reliable than betting markets
At the races favourites win about 1/3rd of the time, however odds on favourites win about 59% of the time...
Chris Farley

Markets and consensus
My take is that markets set the clearing price based on the net views of the participants. These views may or may not form a strong consensus.
Tim Farrelly


9 times out of 10 the consensus will be wrong?
When faced with a huge majority of experts expecting international equities to outperform Australian equities, I blurted this out. I was wrong, and on a few counts.
Tim Farrelly, farrelly's
3 comments Opinion

The real change and opportunity in Japan
A behavioural shift by Japan's people from a 20-year deflationary mindset to an inflationary one represents a major opportunity set for investors for many years to come.
Tim Griffen, Lazard Asset Management

Beware the euro consensus
The US dollar is hitting new 12-year highs almost daily and the euro seems to be plunging to below parity. But there are at least four factors pressuring it the other way.
Anatole Kaletsky, GaveKal

The messy politics of economic divergence
The world is increasingly characterised by divergence – in economic performance, monetary policy, and financial markets.
Mohamed El-Erian, Allianz

Demographic changes, financial markets, and the economy
This paper by Rob Arnott and Denis Chaves looks the effects of different age cohorts on GDP and asset class returns.
Vimal Gor, BT Investment Management
1.75 CPD Research

Bond markets lock up and lock out returns
Bond markets were once the world’s most liquid. Today, trading even $5 million in bonds can be difficult. Funds may limit withdrawals and hold larger cash balances.
Scott Weiner, Payden & Rygel
1 comment Resources
* Rated in the top 3 presentations by Markets Summit 2015

Member comments
The stock-bond disconnect

This article raises the question, but doesn't tackle the question of what will happen when interest rates are eventually forced to rise to forestall inflation...
Chris Farley

Wages after work
The wages v profits argument here falls flat on the basis of changing demographics. The proportion of former workers, ie retirees that no longer earn a wage and are supported by returns on (their) financial capital, has been growing and will continue to grow...
Aaron Minney

A disconnect here
With respect to the above comments, I do not think the question posed by the learned professor was either of these issues. The issue posed in the first sentence is framed in why do we have booming equity markets and extremely low interest rates? I agree that it is more than deficient demand and financial repression...
Craig Offenhauser


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