Forum Fodder

Forum Fodder | Friday 30 August 2024
“Markets are now haunted by a phenomenon known as the ‘normalisation of deviance’… A decade ago, investors might have panicked if an American president threatened to defenestrate the Fed chair or expand the budget deficit by trillions of dollars. Now they barely blink.” - Gillian Tett, columnist and member of the editorial board for the Financial Times (29 August 2024)
All the best for another week’s continuing education!
Graham

Markets | Finology

Do political leaders deserve a break?
Short breaks can improve decision-making and overall performance. A 2023 study found that holidays “meaningfully improve” the accuracy of equity analysts’ earnings forecasts.
Ngaire Woods, Oxford University | Read

Markets | Investing | Philosophy

Thinking Differently: Pippa Malmgren
With armed conflicts raging in Europe and Middle East, and the prospect of a US-China showdown over Taiwan, many investors believe World War III is increasingly likely. But the Forum’s Visiting Fellow, Pippa Malmgren, thinks differently…
Wayne Fitzgibbon, Thinking Differently | Watch, Listen

Markets | Finology

Will humans survive the rise of the machines?
Wetware-powered AI is changing the way we manage risk and uncertainty, including in financial markets. Its rise will also profoundly change how humans think about the nature of reality — in finance and more generally.
Pippa Malmgren, Portfolio Construction Forum| Read

Markets

The Inquisitor: WWIII is increasingly likely – Woody Brock
The free world faces two related threats. First, the likelihood of World War III is rapidly rising. Second, the creation of a coalition of law-abiding nations appears less likely. And investors anticipating significant interest rate cuts face disappointment.
Robert Huebscher, Portfolio Construction Forum | Watch, Listen

Markets

Are supply chains fixed or broken? Outlook for 2024 and beyond
Are supply chains fixed or broken? In the second half of 2024, firms are having to deal with logistics network volatility. Heading into 2025, political and regulatory risks provide risks and opportunities for investors.
Chris Rogers, S&P Global | 0.25 CE | Read

Finology

Research Review: Moral luck and investment
Whilst a bit quant heavy, I can relate a lot to the content with what I have observed in my business, with the way that advisers and clients evaluate and choose investments…
Duncan Niven, Pitcher Partners | Read

Strategies | Markets

Crockpot Bonds
Thanks Tim, both for the confirmation bias (my absolute favourite) and the truth bombs about correlation and portfolio construction…
Dacian Moses, Waterfall Way Associates | Read

Strategies | Markets | Investing | Philosophy | ** All members **

Short Course: Mastering private debt investing
Examining the unique characteristics that make private debt a compelling investment. Private debt has grown in popularity as an alternative source of debt financing, with the asset class tripling in size since 2008. Curated and produced by Portfolio Construction Forum, and led by private debt investing subject matter expert, Andrew Lockhart, this self-paced, two-hour online short course equips you with the expertise to navigate private debt investment confidently across diverse market conditions.
Metrics & Portfolio Construction Forum | 2.00 CE | Enrol

Finology | Philosophy | ** Premium **

Behavioural Finance: Investment decision-making short course
Led by behavioural finance expert, Herman Brodie, this online, on-demand course completed at your own pace will help you identify, analyse and evaluate the principal human preferences that influence decision-making in situations of uncertainty, so you can recognise and identify these preferences in others, to improve investment decision-making.
Herman Brodie | 8.00 CE | Enrol

Finology | Philosophy | ** Premium **

On The Hunt: Ethical behaviour profiling
On the Hunt focuses on the human factors in investment portfolio construction, including the ethical implications. It will help you better identify and understand how investing biases, beliefs and behaviours impact portfolio construction practices - and therefore, investment outcomes - to help you build better quality investor portfolios.
Katherine Hunt, Ardentura Consulting | 1.00 CE (Ethics) | Premium | Enrol

Markets

The defining economic issue of the US election
Economists are struggling to reconcile their upbeat views on the US economy with the angst of average Americans. The key measures of economic performance are almost perfect. But voters continue to cite the economy as a top issue.
Stephen Roach, Yale University | Read

Markets | Philosophy

Thinking Differently: Arthur Sinodinos
Many Australians view the rise of western “populism” as irrational. But former Australian politician and immediate past Ambassador to the US, Arthur Sinodinos, thinks differently.
Wayne Fitzgibbon, Thinking Differently | Watch, Listen

Strategies | Investing

Spotlight on active management
While the majority underperform, there are still many, many managers that do outperform their relevant index over long periods. The rewards for good manager selection are real and worthwhile - if you have above average manager selection skills.
Tim Farrelly, farrelly’s Investment Strategy | 0.50 CE | Read

Markets | Finology

Research Review: Personality and portfolio allocation
The Big Five model of personality traits remains the dominant framework in personality research. Increasingly, it appears that aspects of investor sentiment and decision-making can also be explained by Big Five personality traits.
Rob Hamshar, Portfolio Construction Forum | 1.50 CE | Read

Strategies | Finology | Philosophy

Bird’s Eye View: The role of the financial adviser
I was speaking to a new doctoral student whose thesis is on the role of risk profiling in the development of an investment strategy. This led us to discuss why risk profiling was important and the purpose of investment advice.
Ron Bird, Portfolio Construction Forum | Read

Markets

Very Timely Warning
The House of Lords is often seen as an unelected anachronism but it contains far more able and thoughtful individuals that the train wreck that the Commons has become…
Wayne Fitzgibbon, Thinking Differently | Read

Markets

Mostly agree
However, the reference to ‘crowding out’ private borrowing relies on loanable funds theory…
David Graham | Read

Markets

The moral hazard of lower interest rates
Capital markets believe that interest rates are indeed on a downward path. Regulators would do well to get ahead of the next speculative cycle while they still can.
Dambisa Moyo, Versaca Investments | Read

Strategies | Markets

Crockpot: Bonds are no longer negatively correlated with equities
Many commentators have noticed the positive correlation between bonds and equities over the past few years and announced the end of bonds as a useful diversifier - often claiming “The 60/40 portfolio is dead, long live alternatives!”.
Tim Farrelly, farrelly’s Investment Strategy | Read

Markets | Investing | Finology | Philosophy

Thinking Differently: Chris Joye
With Australian insolvencies at a 25-year high and corporate debt defaults rising globally, many investors are hoping that central banks will significantly reduce interest rates. But Coolabah Capital’s Chris Joye thinks differently.
Wayne Fitzgibbon, Thinking Differently | Listen, Watch

Markets

Supply chains find a way – resilience amid natural disasters
Investors must pay close attention to emergent supply chain disruption events, including those caused by mother nature. Four real-world examples reveal both exposure and impact of weather-related disruptions.
Chris Rogers, S&P Global | 0.25 CE | Read

Strategies | Philosophy Editor’s Pick!

If you do anything, embrace scenario planning
The primary criticism directed at those who think about the future is that it’s an act of futility. But thinking about how the future may unfold has proven to be a useful way to make decisions amidst radical uncertainty.
Vikram Mansharaman, Portfolio Construction Forum | 0.25 CE | Read, Listen, Watch

Markets

Inside the Club Thinking
With all due respect to Prof. Rogoff, the problem is not the lack of full “independence”, nor the use of flawed New Keynesian models, but far too much New Keynesian thinking…
Wayne Fitzgibbon, Thinking Differently | Read

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