01 February 2016

Top Five Articles from January: Charts, Commodities, and Compound Interest

Posted In: Best Of

1. 34 Charts: This Time Is Different

“Recession” is a word on everybody’s lips these days. Will Ortel drills down into 34 revealing charts for insight into the overall outlook for growth. His conclusion: Growth will come, but be realistic. It might take a while.

2. A Valuation Method for Private Equity

A new firm offers up a unique valuation methodology for private equity. In this interview with CFA Institute, Sheridan Porter, cofounder of FEV Analytics, reveals some of the secrets to how they overcome traditional problems in order to value private companies.

3. Five Reasons to Start Your Own Firm and Four Steps to Take to Do It

Today, a confluence of factors reinforces the opportunity to launch a financial advisory firm. Sameer S. Somal, CFA, enumerates five of them — as well as some advice on constructing the framework for getting your firm off the ground.

4. Dumb Alpha: The Drawbacks of Compound Interest

With short-term forecasts, random walks tend to outperform the accumulated wisdom of professional forecasters. That estimation uncertainty is not reduced for long-term forecasts either, because mean reversion cannot overcome the effects of compound interest. Luckily, there is a range of techniques, from simple to sophisticated, that can help long-term investors with this challenge, says Joachim Klement, CFA.

5. The Commodities Crash: A Supply-Side Perspective

Commodities producers took another hit at the start of 2016, following a brutal 2015. Many commodity prices hit multi-year lows. Weakening demand from China is widely blamed for the declines, but the more important factor is the supply glut, says Janet Zhang.

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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.

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About the Author(s)

Paul McCaffrey

Paul McCaffrey was formerly the editor of Enterprising Investor at CFA Institute. Prior to that role, he served as an editor at the H.W. Wilson Company. His writing has appeared in Financial Planning and On Wall Street, among other publications. He is a graduate of Vassar College and the Craig Newmark Graduate School of Journalism at CUNY.