Practical analysis for investment professionals

David Larrabee, CFA

148 Posts

Biography

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

Author's Posts
Weekend Reads for Investors: Market Forecasts, the Wall of Worry, and Oil

Fund managers are generally an optimistic lot, especially in the midst of a bull market, but even more so at the start of each new year. The turning of the calendar has become a popular occasion for introspection, an appraisal of what might have gone wrong—a lot for active managers in 2014—and, unfortunately, predictions. The ubiquitous “Top Ten” lists, while generally entertaining, are as much marketing pitches as they are serious reading. Below are some other stories that caught my eye in recent weeks.

Best of 2014: Taking Stock of the Year in Equities

Below I highlight some of the best equities-related content I came across over the past year, as well as some of my favorite quotes.

Will Passively Managed Assets Continue to Grow Relative to Actively Managed Assets in 2015?

While actively managed funds still account for 83% of global assets under management according to recent Morningstar data, passively managed funds have been gaining ground in recent years. This prompted us to ask CFA Institute Financial NewsBrief readers if they expected this trend to continue in 2015.

Aswath Damodaran: Reliable Investment Valuations Balance Numbers and Narratives

When it comes to valuing stocks, the most reliable valuations come from imaginative number crunchers and disciplined storytellers, says Aswath Damodaran.

13F Watch: Active Management Looks Like a Contrarian’s Bet

It’s been an annus horribilis for stock pickers. In the US, fewer than one in five active fund managers are beating the market this year, their worst showing in over a decade. As a result, active funds have been bleeding assets and passive products are seeing record inflows. The fortunes of active managers certainly weren’t helped by Warren Buffett, who earlier this year advocated for passive investing.

Weekend Reads: Beating Expectations — Again and Again

Companies have gotten so good at managing earnings (and Wall Street) these days that when reporting season rolls around, it’s hard to ascribe any value to news that a company “beat” expectations. In fact, a review of quarterly data compiled by FactSet Research Systems reveals a recurring pattern in recent years. Companies guide earnings and revenue estimates down over the course of the quarter and then clear the lowered bar when they report financial results. Markets cheer. Rinse and repeat.

Poll: Is Ebola a Significant Risk Factor for Global Investors?

We asked CFA Institute NewsBrief readers to comment on whether they believe the Ebola outbreak poses a threat to the global investment landscape.

Weekend Reads for Investors: Volatility and the “Yellen Put”

Up until last week’s wild ride for stocks, volatility had been largely absent from the market, but the cumulative effect of ongoing geopolitical chaos, spreading Ebola anxiety, and uninspiring economic data, combined with the rumored unwinding of some leveraged positions by hedge funds, at least temporarily jolted global equity markets. Complacency was quickly replaced with panic and we got a reminder of what happens when everyone heads for the exit at the same time.

Poll: Will the Hewlett-Packard Breakup Create Shareholder Value?

We asked CFA Institute NewsBrief readers whether they thought the planned breakup of HPQ would create value for shareholders in five years.

Market Experts See Slow Growth, Increased Volatility, and a Comeback for Active Management

Three top Wall Street strategists shared their predictions on the future performance of global financial markets with the CFA Society Toronto recently. While guardedly optimistic, they included calls for slow growth, increased volatility, and a return for active management.



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