The Future of Finance: Seven Posts from the 68th Annual Conference
The frontiers of finance were on full display at the 68th CFA Institute Annual Conference in Frankfurt, Germany, late last month. With presentations covering a diverse range of topics, from geopolitical frameworks, to the biology of risk-taking, to bitcoin, and beyond, delegates gained powerful and practical insights.
To wit, John Coates, research fellow in neuroscience and finance at the University of Cambridge, discussed how human biology can help us understand investor (over)confidence, exuberance, timidity, or pessimism in the keynote speech. Delegates also heard former European Central Bank (ECB) economist Jürgen Stark lay out his take on ECB monetary policy, claiming “central banks have engaged in a great and risky experiment — we have no way of knowing how this might end.” The final presentation was delivered by Ian Bremmer, the founder and president of the Eurasia Group. Bremmer considers how the structural framework under which the world has operated in the post-Cold War era has faltered and a new world order is taking shape. These changes profoundly impact the risk landscape for global investors, with implications for currency values, inflation, trade deals, energy markets, and more.
Highlights from a number of powerful conference presentations are below:
1. Ian Bremmer: Geopolitics Is Unstable and Dangerous Now
Ian Bremmer argues that the world has gone from a geopolitical environment that was dangerous but stable during the Cold War, to one that was unstable but not very dangerous after the fall of the Soviet Union, and finally to an emerging world order that is both dangerous and unstable.
2. Charles de Vaulx: Seeking Value in an Overpriced World
Charles de Vaulx, CIO, portfolio manager, and partner at International Value Advisers (IVA), presents a powerful case for investors to pursue flexibility and invest wherever securities are safe and cheap — whether that be overseas or in other asset classes.
3. Long-Termism: An Opportunity Worth Seizing
CFA Institute assembled a panel discussion to identify concrete ways that the investing profession can shift focus from short-term myopia to providing long-term benefits for all stakeholders. Rebecca Fender, CFA, considers the panel’s insights.
4. The ECB and QE: A Risky Experiment
Jürgen Stark makes the case that ECB monetary policy is dangerous and unlikely to return Europe to sustainable economic growth, stating, “They have launched a risky experiment and we do not know the outcome.”
5. Financial Innovation and Market Structure
A blue ribbon panel discusses the technology platform that is high-frequency trading (HFT) and highlights that the technology can be used for both good and ill, so the issue comes down to bad actors, not an inherent flaw in the technology.
6. Bitcoin: It Is More Important Than You Think
Charles G. Cascarilla, CFA, founder of bitcoin exchange itBit, believes bitcoin and its blockchain technology are misunderstood by most investors. Specifically, bitcoin’s value lies not in its worth as a currency, but in its open-ledger technology as well as the fixed number of nodes within that ledger. Ingenuity applied to this technology promises uses that are currently beyond human imagination.
7. Is Homo Economicus Extinct?
Is the notion of Homo economicus — an image of human beings as rational and narrowly self-serving actors — on its last legs? Two presentations on the opening day of the conference provided evidence to suggest that, at the very minimum, it should be on the endangered list.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Photo credit: W. Scott Mitchell
