Practical analysis for investment professionals
Take 15: The “New Normal,” Cap-Weighted Indexing, and Passive Strategies in Europe and Asia

Lower expectations for economic growth and capital markets returns stem from increasing indebtedness and deficits, as well as from demographic trends in the "New Normal." Jason Hsu discusses the implications for passive index strategies and cap-weighted index investing and talks about how asset owners and investing institutions view these issues in Europe and Asia.

Derivatives: The Anti-Money

Researchers at CERN, the European Organization for Nuclear Research, in Geneva, Switzerland, made a splash recently with the “discovery” of the Higgs boson — a subatomic particle that creates a vital link between matter and anti-matter. For researchers at CFA Institute, the Higgs boson discovery is interesting because it parallels a great challenge facing the world of finance: derivatives. You see, in finance, derivatives contracts are kind of like the Higgs boson as they contain the vital link between money and anti-money.

Write or Wrong: A Flat Market Doesn’t Mean Flat Returns

The world is flat, or so people thought, until enterprising Greek philosophers challenged the notion in the 6th century BC. More than 2,000 years later, Ferdinand Magellan made a practical demonstration of that fact when he circumnavigated the globe. Although stocks in 2011 sailed through periods of sunshine, wind, and rain, many equities markets ended up flat just the same. Nonetheless, some investors proved that it is possible to make money in this market — and they did so writing covered calls.

“India Does Not Need to Learn Capitalism from the West,” Says Lord Desai

At the second annual India Investment Conference in Mumbai earlier this month, Lord Meghnad Desai, emeritus professor of economics at the London School of Economics and Political Science, delivered an eloquent presentation on “The Rediscovered India and the Road Ahead.”

Derivatives Roundup

As you are aware, the derivatives markets never sleep. There is always something going on. Following a year of turmoil concerning regulation and the use/misuse of derivatives, many stories from this rapidly growing segment of the investment industry warrant your attention.

Take 15: The Case for Investing in Africa

Clifford D. Mpare, CFA, discusses which African nations have the most improved macro environments and how these factors can support equity investments. Mr. Mpare also explores valuation of African equities including long-term trends, sectors of interest, and company case studies, as well as the importance of diversification.

Felix Zulauf Revisits His Predictions, Sees More Trouble Ahead

Last May, at the 64th CFA Institute Annual Conference in Edinburgh, Scotland, veteran investor Felix Zulauf laid out a number of bearish predictions that have largely proved to be on the money. Now that six months have passed — and with so much happening in the world — we thought it was a good time to review his predictions and get a fresh update on his outlook for the economy and financial markets.

Helping Clients Monetize Privately Owned Businesses

Starting a private business could put you on the path to untold riches. But it could also land you in a precarious financial position.

Occupy Wall Street and Islamic Finance: Economic Justice Is Enticing — But Elusive

Both OWS movement and Islamic finance aspire to reduce economic injustice but experience of Islamic financial sector shows that economic justice is enticing but elusive.

Book Review: Ben Graham Was a Quant

The roots of value investing can be traced back to the 1934 publication of Benjamin Graham and David Dodd’s classic, Security Analysis. Graham later disseminated his views to the general public in the highly regarded book The Intelligent Investor. The influence of Graham’s methodology is indisputable. His disciples represent a virtual who’s who of value investors, including Warren Buffett, Bill Ruane, and Walter Schloss. As a measure of his enduring impact on the field, a search of “Benjamin Graham” on Amazon.com yields more than 900 results concerning Graham’s writings and works about his investment philosophy. Given the success of the master and his students, it is no wonder that Graham remains an investor of immense interest to practitioners.



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