Forum Fodder

Forum Fodder | 01 November 2024

“The absolute level of risk in a portfolio shouldn’t be an unwitting consequence of the asset allocation process… or of the search for superior risk-adjusted returns. The absolute risk level must be consciously targeted. In fact, in my view, it’s the most important thing.” - Howard Marks, co-founder of Oaktree Capital Management, in a memo to clients (22 Oct 2024)

All the best for another week’s continuing education!
Graham
P.S. Stand for More!  Enrol by 30 November for the 2025 CIMA program.
Certified Investment Management Analyst^® (CIMA^®) certification is the peak, international technical portfolio construction certification program designed for investment management analysts - that is, those involved in any aspect of constructing multi-asset, multi-manager portfolios. Find out more and enrol.

Markets

Is capitalism really the cause of global inequality?
In 2014, Thomas Piketty’s book, Capital in the Twenty-First Century, reshaped the inequality debate. However his central argument – that capitalism inevitably leads to growing inequality – falls apart when looking at cross-country inequality.
Kenneth Rogoff, Harvard University | Read

Strategies | Markets | Philosophy | As seen at Strategies Summit 2024

Most people don’t understand the drivers of real estate returns
Did you ever wonder why so many pundits got their Australian house price forecasts so wrong? Real estate pricing is not driven by interest rates, population growth, or tax regimes.
Chris Bedingfield, Quay Global Investors | 0.50 CE | Watch, Listen

Strategies | Markets | Investing | As seen at Strategies Summit 2024

‘Whole’ portfolios need both public AND private debt
Higher rates and structural changes, such as tighter regulation, are reshaping both public and private debt markets, requiring investors to take a multi-sector and relative value approach across both.
Christian Stracke, PIMCO | 0.50 CE | Watch, Listen

Strategies | Markets | Investing | Philosophy | As seen at Strategies Summit 2024

60/40 should not be what it used to be
The market growth and quality of private market alternatives provides investors an opportunity to meaningfully enhance 60/40 with higher returns and less volatility.
Frank Danieli, MA Financial Group | 0.50 CE | Watch, Listen

Finology

Research Review: Ethical blindness
Ethical blindness is one answer to the question “Why do good people do bad things?” Together, these two papers strongly reinforce the idea that ethical practice requires that we regularly hit the brakes and check our ethical blind spots.
Rob Hamshar, Portfolio Construction Forum | 2.00 CE (Ethics) | Read

Markets | Finology | Philosophy

A Language of Its Own!
Thanks, Wayne. A great response. I have added to my reading list today and look forward to making some more connections with “Narrative Economics”…
Dacian Moses, Waterfall Way Associates | Read

Strategies | Markets | Investing | Philosophy

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 **

On The Hunt: Ethical behaviour profiling
On the Hunt is a monthly lecture series focused 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

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 (incl 1.00 ethics) | Enrol

Markets

The rise of big government ruined capitalism - Ruchir Sharma
What went wrong with capitalism? According to Ruchir Sharma, progressives are right, in part, when they mock modern capitalism as “socialism for the rich.”
Tom Switzer, Centre for Independent Studies | Watch, Listen

Strategies | Investing | As seen at Strategies Summit 2024

Passive can beat active in private markets, too
Private Equity pooled returns have been attractive while also less volatile than investing in a single fund or fund-of-funds. Enabling investors to “buy the private market” would complement portfolios just like in public markets.
Edward Talmor-Gera, NewVest | 0.25 CE | Watch, Listen

Strategies | Markets | As seen at Strategies Summit 2024

Optimal portfolios need risk premia
An Alternative Risk Premia (ARP) approach to investing, rooted in academic research, can deliver more stable and resilient performance even in volatile market conditions.
Paul Fraynt, K2 Advisors | 0.50 CE | Watch, Listen

Strategies | Philosophy | As seen at Strategies Summit 2024

You need to combine multiple alts in your portfolios
It is essential that portfolios are exposed to different, uncorrelated alternative risk factors and capture a variety of available risk premia to maximise risk-adjusted returns.
Antonio Ferrer, LGT Capital Partners | 0.25 CE | Watch, Listen

Strategies | Finology

Research Review: AI in investment management and advice
At one extreme, the whole investment decision-making process could be turned over to AI - at the other, it can just be used in data collection. These two papers capture the challenges of integrating AI into funds management and financial advice processes.
Ron Bird, Portfolio Construction Forum | 2.00 CE | Watch, Listen

Markets | Finology | Philosophy

Thinking Differently: Markets - more than the sum of the parts
I’ve been trying to understand H Minsky’s Financial Instability Hypothesis… That stuff is denser than a neutron star. But everybody’s favourite Australian Economist (not to be confused with Austrian Economist), Dr Steve Keen, has been working on using Minsky’s model for “a new economics”…
Dacian Moses, Waterfall Way Associates | Read

Markets

Kamala Harris’s economic priorities
With polls suggesting that Kamala Harris has at least a 50% chance of winning next month’s US presidential election, questions about her economic-policy agenda have come to the fore.
Nouriel Roubini, Roubini Macro Associates | Read

Strategies | Investing | Philosophy

Research Spotlight: Brandywine Global Opportunistic Equity
This Research Spotlight focuses on the Brandywine Global Opportunistic Equity strategy, a benchmark unaware true value global equity strategy that has produced very strong alpha.
Portfolio Construction Forum | 0.50 CE | Watch, Listen

Markets | Finology | Philosophy

Thinking Differently: Markets - more than the sum of the parts
Read any book on Complexity Science and the first example of a Complex Adaptive System is the economy and financial markets. Complex systems exhibit “emergence” which means that the whole is always more than the sum of its parts.
Wayne Fitzgibbon, Thinking Differently | Read

Strategies | Markets | Investing | Philosophy | As seen at Strategies Summit 2024

Private markets should be used to replace public equities
In a higher interest rate regime, with a higher correlation between stocks and bonds, replacing public equities with private market investments makes sense.
Matthew Michelini, Apollo Global Management | 0.25 CE | Watch, Listen

Markets

Reshoring is not permanent - 4 countries that need to stay ahead
Manufacturing reshoring by global multinationals is key to economic development in frontier and emerging markets. Understanding the shifting dynamics can be critical to investment decision-making at both the country and sector level.
Chris Rogers, S&P Global | 0.25 CE | Read

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