August 2014

CFALA e-Newsletter: August 2014

Welcome to the CFALA e-newsletter, a periodic publication with stories about noteworthy events and programs sponsored or hosted by the society, guest articles by members, book reviews, and other items of interest to CFALA members. Click on the headlines below to read the full stories. And if you’d like to contribute a story suggestion or, even better, write an article, we’d love to hear from you. Please email Executive Director Laura Carney at

*Please note that the content of this e-newsletter should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of  CFA Society Los Angeles.

In this issue ...

CFALA Elects New Board and Approves By-Law Amendments at Annual Meeting of the Members

On July 9th CFA Society Los Angeles held its Annual Meeting of the members at the Beverly Wilshire Hotel in Beverly Hills.  Members approved changes to the society bylaws,  elected a new board for fiscal year 2014-15 and recognized society volunteers for the their contributions.

Small changes were made to clean up and clarify the bylaws.  The two most substantial amendments were to add a student membership sub-category under associate membership and to align our membership requirements with the changes that were made at CFA institute last year.

The entire slate proposed by the nominating committee was unanimously approved.    See below.

President – Kerry Rapanot, CFA
Vice President – Rama Malladi, CFA
Treasurer – Nathan Palmer, CFA
Secretary – Ned Downes, CFA
Immediate Past President – Mark Harbour, CFA

Board of Governors – 2 year term expiring 2016
David Bradley, CFA

Board of Governors – 3 year term expiring 2017
Ryan Buckmaster, CFA
Akiko Hayata, CFA

Returning Governors (Not Up for election)
Dan Pomerantz, CFA, 3-year term expiring 2015
Christopher Luck, CFA, 2-year term expiring  2015
Stephanie Luh, CFA, 3-year term expiring 2016

The new board will begin their terms as of September 1st.

The following society volunteers and companies were recognized for their leadership and service:

Outgoing President Award                  Mark Harbour, CFA
Outgoing Board Members                   Roger Gewecke, Jr., CFA, Monica Erickson, CFA, Alejandra Folguera, CFA

Governors Award for Outstanding Lifetime Contributions               Roger Gewecke, Jr., CFA
Outstanding Society Member                                                          James Lewis, CFA
Outstanding Committee Members                                                  Dan Pomerantz, CFA, Victor Wood, CFA
James H. Fletcher, CFA Emerging Leader Award                          Ryan Buckmaster, CFA
Leadership Award for Advocacy of Professional Ethics                 Larry Harris, PhD, CFA
Corporate Award                                                                              BlackRock

During the meeting, outgoing president, Mark Harbour provided a re-cap of some of the society highlights from the past year.  He noted that we had over 55 networking, career development and educational programs with recognized speakers such as Ian Neld, Howard Marks, Jeffrey Gundlach, Barton Waring, and Jean Brunel.  As always, a great annual forecast slate with Greg Valliere, William Dunkelberg and Nancy Lazar moderated by Jane Wells.  The list of great speakers continued throughout the summer with the Annual Meeting’s key note speaker, Charles Ellis,  and Dan Fuss  who spoke on July 11th

The society received the “Enablers Award” from CFA Institute this past year for demonstrating exceptional achievement based on successful implementation of governance and volunteer management strategies.

In addition, our own Marla Harkness - who has been a remarkable volunteer leader to CFA Society Los Angeles, the CFA Institute, and many other Societies as Chair of the President’s Council - was given the CFA Institute Special Service Award for her exceptional efforts over the years (there have been only 16 previous recipients of this award around the world).

Our public advocacy and ethics committee was off to a great start this past year with a meeting of select CFA members, community leaders, and Rep Maxine Waters.  Dan Pomerantz, chair of the committee,  also led a successful campaign with council member Paul Krekorian to have May 2nd declared “Putting Investors First Day” by the City of Los Angeles.

The society continues to pursue an active monthly meeting schedule with key industry leaders and major employers in our area in moving toward forming a strategic advisory council.  Our intent is to ensure we maintain an active communication network and collaboration with businesses, other professional organizations such as CAIA, California Hedge Fund Association, Cal CPA, etc. and academic institutions to ensure our members have access and connections to the right firms and the most innovative ideas.

Incoming President, Kerry Rapanot, CFA announced that the CFA Society Los Angeles board was going to be participating in a strategic planning session over the upcoming weekend to clarify the societies’ priorities for the next 3 years.  The results from the most recent member survey indicated that the three key takeaways were for a better job board, career development and a distinguished speaker series.

It was also noted that Roger L. Gewecke, Sr. CFA, who was CFA Society Los Angeles president from 1971-1972 passed away on June 29th.  Last year at the annual meeting he was in attendance with his son and grandson.  He was remembered for his leadership and contributions over the years.

The evening wrapped up with Charles Ellis as the keynote speaker discussing his book “What It Takes.”   All members who were in attendance received a free copy at the end of the evening.

By Laura Carney 


CFA Los Angeles Member Organizes Alternative Investment Conference


As the number of alternative investment products continued to increase, Thomas Mahoney, CFA, noticed that alternative investment conferences were being held around the country in cities like Seattle, Austin and Las Vegas, all of them with standing-room-only attendance.   Mahoney, who is the chair of the CFA Los Angeles Alternative Investment Community of Interest, saw an opportunity to serve the professional community.  “I thought that it would be an important service to the region’s professionals to gather together many top thinkers, including strategists, allocators and managers for a day of deep thinking and analysis on the key investment topics, “ Mahoney said.  From this thought has emerged a conference that also appears to be headed toward standing-room-only status:  ALTSLA.


ALTSLA 2015 will be held March 5, 2015 at the Los Angeles Hotel Downtown.  Early bird registration before October 31 is $75, going to $150 after that date.  Breakfast, lunch and cocktails are included.  It will include over thirty speakers including Richard Bernstein, former Chief Investment Strategist at Merrill Lynch, who, according to Mahoney,  “has a very interesting take on alternatives.”  Others include Rob Arnott, Chairman of Research Affiliates, Mark Yusko, CEO of Morgan Creek Capital, Jack Schwager, author of Hedge Fund Market Wizards, Peter Brandt, CEO of Factor, LLC, Gary Dokes, CIO at Arizona State Retirement System, and Andrew Hoffman, Alternative Investment Analyst at PIMCO.  There will be six panel discussions covering all the major alternative investment categories including hedge funds, real estate, private equity, commodities and managed futures, and asset allocation.  Additionally, there is interest from some very high-profile speakers who are considering adding their names to the list.


Once Mahoney got the idea, he partnered with Jason Zumberge, President of CAIA Los Angeles, and Jason Gerlach of the California Hedge Fund Association.  Gerlach notes that CHFA has worked with CFA Society San Diego on several events with much success, and they expect similar success with CFA Society Los Angeles.  Gerlach said, “ALTSLA is going to be excellent, and for Los Angeles, the first event of its kind.  It’s going to be a day-long event focused exclusively on alternative investing – hedge funds, liquid alts, private equity, etc.  We’ve pulled together a top flight set of industry leaders to speak and we are trying to foster as much idea-sharing as possible.  We’re thrilled with the boom we’ve seen in the alternative space here in California over the past 5 years and ALTSLA will only strengthen and accelerate the growth of the industry here in the state.”


Even though Mahoney has some help with the conference, Gerlach made it clear that ALTSLA is due to Mahoney’s efforts.  “Tom Mahoney at UBS was really the catalyst for ALTSLA.  It was his idea and by the time he reached out to me and the California Hedge Fund Association he had accomplished quite a lot.  He deserves all the credit.  Since we got involved a few months ago, we’ve certainly helped with introductions and ideas, but it’s his baby.


Mahoney said understanding alternative investments is important as the asset class attracts increasing investment flows from institutional and retail investors.  “As one moves from traditional stocks and bonds into alternative investments, the analytical complexity increases exponentially.   This combination of complexity and increasing size makes it imperative that professionals have a deep analytical framework to evaluate alternative investments.  While assets in alternatives are surging, our goal is not to follow the crowd but rather to evaluate when, how, and to what extent it makes sense.”


Although this is the first year of the conference, it clearly has the ingredients of a veteran:  top speakers, enthusiastic organizers, a list of sponsors and subject matter that is important to a growing number of investors.  The organizers indicate the interest for the conference is high.  “Because of the interest level we are sensing, we think that this could become a multi-day event, “Mahoney said.


To register for the ALTSLA 2015 conference please go to


By Tom Derse, CFA

Your Investment Management Job

If you were starting all over again in the investment business, would you be able to get a position in today’s competitive job market?  It is harder than ever to break into the investment field, with high caliber candidates competing for limited positions.  In a recent Research Foundation book Investment Management: A Science to Teach or an Art to Learn (Page 91), authors Fabozzi, Focardi and Jonas ask Human Resource (HR) professionals from asset management firms the qualities they find most valuable in their hiring.  These qualities include:

1.      Analytical Ability

2.      Broad Knowledge

3.      The Ability to Communicate

4.      The Ability to Reason

5.      Out-of-the-Box Thinking

6.      High Interest in Financial Markets

7.      Humility

A review of these qualities, and a self-assessment of our skills within those areas will help determine whether we would be worthy of an investment job in the current environment.

HR professionals frequently cite the ability to analytically work with data and models as an important quality for a new hire.  While being exact and rigorous in analysis is important, placing too much emphasis on models was often cited as a challenge to overcome. It is often the candidate who can combine the analytical skills with the ability to make judgments on the big picture that attracts the most favorable attention during the hiring process. 

Broad knowledge is another attribute commonly cited as a valuable skill for the investment job candidate.  Understanding financial theory, economics and statistics is important but history, philosophy and literature is also valuable said Robert Schiller during a recent commencement speech.  These thoughts are shared by many HR professionals as the financial crisis has created a demand for broad knowledge that “opens the door to critical thinking” according to insights provided by authors Fabozzi, Focardi and Jonas.

One of the biggest changes I see in current job candidates is their ability to communicate. Viewing the CFA Institute Research Challenge, you can’t help but notice the poise and self-assuredness of the teams as they present their findings. These communication skills are important to keep communication lines open during challenging times and to explain new ideas to future clients and colleagues.

Determining a person’s thinking process is yet another important attribute for the investment hiring decision according to the HR professionals.  The ability to take large quantities of data and separate true information from noise is a valuable skill in today’s intricate financial markets.  How well one forms their thoughts, tests assumptions and handles competing ideas closely relates to superior performance for the new hire.  That’s why the interview question “How many gas stations are in North Dakota” seeks not the actual answer, but how the candidate would logically think through answering the question.

Out-of-the-box thinking requires the ability to understand, to critique and to find new angles from which to approach the problem at hand.  A key in developing out-of-the-box-thinking is to be exposed to different ideas and points of view and understand the rationale behind each.  This valuable characteristic is often challenging for the HR professionals to determine during the interview process but is important for the candidate to possess in this ever-changing world in which we live and invest in.

Candidates who express a strong motivation to work in the investment industry are often willing to work the long hours and endure the pressure that typically is required for success in the business.  Having passion for the markets and what drives the markets is commonly cited as an important characteristic for the job candidate to possess.   

Having confidence without arrogance is the final characteristic of a strong candidate for an investment management job according to the authors’ studies.  The humility to admit ones mistake and realize when your opinion might need to be revised is a valued commodity in the ever-changing investment business and recognizing what can and cannot be done often separates the successful candidate from the not-so-successful candidate.

Now that we have reviewed the seven important qualities that HR professionals look for in their new investment hires, how do your skills rate?  Would you get the job today? Have you been investing the time it takes to assure your expertise remains at a high level and that you remain a valuable asset in the investment community? 

If not, invest the time.  Continue to refine your analytical skills and reasoning abilities that you have developed over the years and polish your communication skills so you can effectively share your insights with others. Work on your out-of-the-box thinking skills and incorporate broad knowledge of topics outside of the investment world to enhance your insights.  Combining your experience and skills with your desire to constantly learn and keep up-to-date with current investment thoughts will help assure your continued success in the investment industry.

By Bud Haslett, CFA
Executive Director
CFA Institute Research Foundation

Outstanding Society Member Roger L. Gewecke, Sr. Passes Away

Roger L. Gewecke, CFA passed away at age 77 on June 30, 2014 in the city of Arcadia, where he lived for 53 years.  He is survived by Barbara, his wife of 55 years, his four children and eleven grandchildren.

He was an active volunteer at the Los Angeles Society of Financial Analysts (now known as CFA Society Los Angeles), serving as its president in 1971-72 and as membership chair for over 20 years.  He was given the Outstanding Society Member award in 1980.

Roger was born in Evanston, WY and graduated from the University of Southern California before beginning his 43 year career in the investment industry in 1959.  He worked for Bateman Eichler Hill Richards, Kidder Peabody, and Van Deventer & Hoch.

A Memorial Mass was celebrated on Saturday, July 26 at 11 am at Holy Angels Church, 370 Campus Drive, Arcadia, CA.  In lieu of flowers, donations may be made to the Arcadia Methodist Hospital Foundation or the Santa Anita Family YMCA.

Eight Lessons You can Learn About the Global Economy by Visiting America’s Busiest Seaport

The brief, five-day truck drivers strike in early July focused public attention on the ports of Los Angeles and Long Beach.  At the beginning of that strike, Quartz' Tim Fernholz took a step back and examined some of the economic insights that can be gained by taking a closer look at the Port of Los Angeles.  Read more...  

LA Rent: New UCLA Study "Confirms" LA is Least Affordable City in US

Southern California Public Radio's Ben Bergman reports on a recent UCLA Luskin School of Public Affairs study on the affordability of Los Angeles' rental market relative to the national rental market.  Contrary to the title and opening of Bergman's article (and other articles as well), the UCLA study merely cites and adds color to the "least affordable" finding of a previous Zillow real estate research study.  Read more...  And more...

Successful Aging: Seniors’ Positive Effects on the Economy

In speculating about the outlook for the US -- especially its urban areas -- it's become popular in recent years to consider certain ranges of activities as "economies" (e.g., Los Angeles' Creative Economy). According to Los Angeles Daily News' Helen Dennis, Oxford Economics recently completed a study (on behalf of the AARP) which attempts to measure the Longevity Economy, encompassing the economic activity associated with people over 50.   Read more...    And more...

MOOC: Introduction to Computational Finance and Financial Econometrics

Coursera and the University of Washington will soon be offering a MOOC (Massively Open Online Course) on computational finance and financial econometrics. The course is non-credit and non-certificate. However, it is free and appears to offer students at least a look at R programming and statistical techniques beyond simple regression.   Read more...   

Influence: Science and Practice by Robert Cialdini

Charlie Munger made prominent mention of this psychology book -- really a popular psychology book when it first came out -- in his 1995 Psychology of Human Misjudgement speech, which we featured in our June e-newsletter.  Your content curation team is only halfway through the book, but feels it contains enough unique insights regarding compliance and social proof to recommend that you at least check out its page on Amazon.  Read more...   And more... 
































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