In Fodder this week, Harvard Professor Carmen Reinhart offers two reasons why sovereign debt crises are now rarer than history would suggest.  Dr Woody Brock clears up confusion around what the Phillips Curve means - and why it's important investors understand it. AB Global's Stuart Rae looks at how our propensity to behavioural biases creates opportunity to generate alpha. Stewart Investors' Amanda McCluskey argues that ensuring your investment process incorporates sustainability factors adds up to better outcomes. And the Forum's Will Jackson reviews two academic papers on our personal values and professional ethics.
- All the best for another great week's continuing education - Graham
P.S. Registration opens next week for Markets Summit 2018 "Changing Gears" (13 Feb) and Finology Summit 2018 "Where investing meets investors" (14 Feb)

QUOTE OF THE WEEK...

The beautiful thing about learning is that no one can take it away - BB King

LATEST...

Markets
The curious case of the missing defaults
For the past two centuries, a "double bust" (in commodities and capital flows) has led to a spike in sovereign defaults. Yet they have risen only modestly since the peak in commodity prices and global capital flows around 2011.
Carmen M. Reinhart, Harvard University | More

Markets
Phillips Curve confusion
During the past three months, a salient topic of debate has been whether the so-called Phillips Curve is relevant in today's disinflationary environment. The debate is important to investors.
Woody Brock, SED | More

Markets | Finology
The Cocaine Brain and other biases
Human beings are subject to behavioural biases, which negatively affect their ability to make rational choices. These behavioural biases create market inefficiencies that active investment managers can exploit to generate alpha.
Stuart Rae, AB Global | More

Strategies | Investing
E + S + G factors all add up to better performance
Ensuring your investment process has the flexibility to incorporate sustainability factors all adds up to improved longer term portfolio performance outcomes.
Amanda McCluskey, Stewart Investors | 0.50 CE | More

Philosophy
Research Review: Personal values and professionalism
What influence do personal values have on our behaviour, as individuals? And how do those values interact with professional standards and ethics?
Will Jackson, Portfolio Construction Forum | 1.50 CE | More

Good Summary
...Framing the household balance sheet as a consideration of 'possibilities' is interesting. Taking today's balance sheet and examining it against future liabilities, specifically the probability of satisfying each liability is the least practiced element of retirement planning...
Brent Bevan, Commonwealth Bank of Australia | More

China madernity??
What a load of codswallop!!!
Craig Offenhauser, Charter Pacific Securities | More

RECENTLY...

Markets | Finology
The moral identity of economic man
Two recent books indicate that a quiet revolution is challenging the foundations of economics, promising radical changes in how we view many aspects of organisations, public policy, and even social life.
Ricardo Hausmann, Harvard Kennedy School | 1 comment | More

Strategies
The optimal shape of retirement planning
A recent research paper that likens the three main retirement planning approaches to shapes provides an interesting way to think about three different retirement planning approaches. In the end, the best option may incorporate all three.
Michael Kitces, Nerd's Eye View | 0.50 CE | 1 comment | More

Strategies | Investing
Research Review: More on portfolio construction
A recent paper that addresses one of the most pressing issues facing the financial community - how to construct long-term investment portfolios to best fit the needs of those saving for retirement - questions the appropriateness of many commonly used techniques.
Ron Bird, University of Technology Sydney | 1.00 CE | More

Strategies
Backgrounder: The rise of impact investing
As some institutional investors build internal impact investing capabilities, the inclusion of impact investments in portfolios may be on the cusp of becoming mainstream.
Will Jackson, Portfolio Construction Forum | More

Strategies
Managing carbon exposure is essential for better risk-adjusted returns
Managing carbon risk within portfolios is increasingly a decision integral to risk management and the pursuit of superior long-term risk-adjusted returns.
Domenico Giuliano, Magellan Asset Management | 0.50 CE | More

Positive but maybe a little too rosy?
... I'm not sure how many fund researchers or advisers would refer to -0.3% pa and mostly certainly not -0.6% pa excess returns for 10 years as falling into the category of 'superb job'.
Brent Bevan, Commonwealth Bank of Australia | More

Plenty of disruption and growth
Tim, great to see further proof that active management is alive...
Jonas Daly, Bennelong Funds Management | More

Nice positive stuff, Tim
I tend to think this SPIVA report (which accounts for survivorship bias) has actually introduced some survivorship bias in this piece of analysis...
Michael Furey, Delta Research & Advisory | More

Keep up to date - follow us @PortfolioForum
There's no need to wait until our weekly Forum Fodder email to know what's new with Portfolio Construction Forum. Just follow us on Twitter to hear as soon as we release new articles on portfolioconstructionforum.edu.au and when registration opens for our onstage programs.

Connect with me on LinkedIn
We also let my LinkedIn network know as soon as we release new articles on portfolioconstructionforum.edu.au and when registration opens for our live programs. If LinkedIn is more your thing than Twitter, I'd welcome you connecting. And of course, I'd welcome having an offline direct conversation with you any time.