June 2018 e-Newsletter

CFALA e-Newsletter: June 2018

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 laura@cfala.org.

*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 ...

Petersen Automotive Museum Serves as site of 87th annual meeting of the members

Southern Californians enjoy a love/hate relationship with their cars.  We are disgusted by the traffic and we resent how we are trapped by the car’s necessity due to lack of public transportation.  Yet we love the freedom the auto provides and the automobile lifestyle that we do best. It is this love affair with the automobile that was on display at Petersen Automobile Museum, the location of the Annual Meeting of the Members of CFA Society Los Angeles.

Somewhat ironically, the museum is not exactly freeway close - it is located on the corner of Fairfax and Wilshire, anchoring the Mid-Wilshire Miracle Mile. But as you approach the building, you quickly realize the drive was worth it. In 2015, the museum went under a $90 million renovation. The result of the work is a piece of art that quickly gets your attention away from financial analysis and toward art and automobiles.

Event chair Daniel Wong, CFA shared why the Petersen Automotive Museum was chosen for the annual meeting.  “We thought the CFALA members would enjoy seeing the Porsche sports cars exhibit, which coincides with the 70th anniversary of the Porsche brand.  Also, after its renovation in late 2015, the museum is better than ever.”

The renovation is a perfect setting for the current exhibit, “The Porsche Effect.”  The first floor is full of the iconic brand, from the ubiquitous 911, to “only one built” racing cars.  In her brief speech after being voted President of CFA Society Los Angeles, Akiko Hayata, CFA admitted she was a car person.  For people with that passion, the museum is close to holy ground.

The Annual Meeting of the Members consists of Society business such as voting for officers and conducting any other business that needs to be addressed.  New Immediate Past President Dan Pomerantz kept the procedures short and good-humored, while fulfilling the proper procedural requirements of a serious organization.

Another major activity of the annual meeting is recognition of the efforts of the volunteers.  There were several awards given to individuals who have played major roles in making CFA Society Los Angeles a thriving professional organization.  The first award went to James Lewis, CFA for “Outstanding Society Member.” James is a past President and stepped up to serve as Treasurer last year.  The next award went to Igor Podolinnyy, CFA for “Outstanding Committee Member,” recognizing his critical role as Chair of the Audit Commission. The “James H. Fletcher Emerging Leader Award” went to Alfredo Gomez, CFA.  Alfredo has been a Level Two coordinator, a Level One coordinator and is current chair of the Alternative Investments Group. The “Corporate Award” went to T. Rowe Price as an annual sponsor of CFALA for the past two years.

And finally, Ken Yee, CFA received the “Governor’s Award for Outstanding Lifetime Contributions.”  Dan Pomerantz, presenting the award noted “This award is special and not given out very frequently.  To be eligible for this you have to make significant contributions over a long period of time. Ken has done that.  I’m not sure how I’m going to get through the list of his accomplishments here. A partial list includes: Past President (2010), PCR for four years ending in 2017.  The PCR is one responsibility level higher than a Society President. Instructor in the USC Review Program since 2001. At the national level, he is currently serving as chair of the US Advocacy Advisory Council.  He is on the Nominations Committee of the CFA Institute. And he’s served on other national committees involving branding and technology.”

Recognition was also given to event Chair Daniel Wong, CFA and Kristen O’Connor, CFA who serves on the Annual Meeting Committee.  O’Connor talked about some of the efforts that go into organizing the annual event. “It can be challenging to find a venue that is optimal for both a business meeting and a social event. We consider several sites each year that we think will be interesting for members, we rotate between downtown Los Angeles and Westside locations, and we select meal options to meet a variety of tastes and dietary restrictions.”

CFA Society Los Angeles lives on the efforts of member volunteers.  Events like a hosted evening at a premier automobile museum, CFA review courses and continuing education seminars don’t happen without hours of work by dedicated members.  All members should consider the various opportunities to pitch in. A flourishing CFA Society Los Angeles is important to members professionally, and your local society would surely benefit.

Tom Derse, CFA Back To Top ^^

CFALA Participates in CFA Societies 2018 financial compensation survey

CFA Society Los Angeles (CFALA) has been participating in the CFA Societies 2018 Financial Compensation Survey since it launched on May 14. This is the first time since 2007 that society members and industry professionals will be able to access a unique comparison of salaries, job satisfaction, motivational factors and other industry trends within our investment and finance community.

More than 25 CFA societies across the US are participating in the 2018 project. The survey is open to professionals throughout the investment industry, whether or not they hold the CFA Charter, to provide a more complete picture of industry compensation levels throughout our market area and throughout the country.

Through Monday, June 18, more than 4,700 responses have been collected from throughout the United States. The best represented markets are San Francisco, with more than 1,100 responses, New York, tallying more 833 responses, and here in Los Angeles, rounding out the top three.

There have been 570 financial and investment industry professionals in the Los Angeles area who have completed the Financial Compensation survey. Of that total, only 46% of respondents hold the CFA Charter, creating a varied data pool and results that will show differences in compensation between charterholders and non-charterholders, if there are any.

The 2018 Financial Compensation Survey is being administered by CFA Society Minnesota (CFAMN), which began the survey in 2013, initially focused only on their society’s market area – Minnesota, North Dakota and South Dakota. Other US societies have jumped on board CFAMN’s effort, with the 2016 CFA Societies Compensation Survey featuring 20 societies – primarily from the Midwest and Florida.

In addition to the aforementioned CFA Societies in San Francisco and New York as newcomers for the 2018 survey, CFALA is joined this year by four societies in Texas – Houston, Dallas/Fort Worth, San Antonio, and Austin.

Individualized results for CFALA’s market area will be available in a whitepaper to be released in September, with a blended California report—combining the results from Los Angeles and San Francisco—and a consolidated national report to follow soon after. CFALA members will have the first access to the survey results.

If you haven’t completed the 2018 Financial Compensation Survey yet, now is your chance before it closes on June 22, this Friday. Help provide valuable insight into compensation levels and pay structure for investment and financial professionals in the area. Your participation in this survey could be the best career investment you make this year.

Andrew Elmers Back To Top ^^ 

CFALA's newest member community - esg investing - kicks off with great interest

Are you curious to learn about ways in which companies can improve long-term performance by enhancing the value of all corporate stakeholders?  Are you interested in reducing portfolio risk by looking at factors beyond typical financial metrics? Are you interested in aligning investments to specific values? These are questions that the newest CFA Society Los Angeles (CFALA) member community is exploring.

The CFALA ESG Investing member community met in the CFALA Member Center for a kickoff event on Friday, June 8. (ESG stands for Environmental, Social, and Governance, and refers to the three main components in measuring the sustainability and ethical impact of an investment.)  Twenty CFALA members came together to brainstorm on a variety of ESG topics and discuss ideas for delivering content around those topics.

Interest in ESG is growing globally, creating more opportunities to better serve investors.  Integrating ESG into the investment process also aligns philosophically with the CFA Institute. CFA Institute President, Paul Smith, CFA, shared the following comments recently at the Annual CFA Institute Conference in Hong Kong:

“Charterholders should do their bit in not only generating value for investors, but also foster an industry that can better serve wider society.  Our industry’s future hinges on proving to our clients - both institutional or private - that not only are their interests at the core of what we do but that we also recognize that finance plays a pivotal role in helping the communities we serve attain their objectives: financial, environmental and social.”

We are excited about the growing interest in ESG, exploring topics within ESG and connecting with others who are interested in ESG Investing.  We invite others who are interested to join us at our upcoming quarterly meeting to be held on Friday, September 21st.

Jeff Kuhlman, CFA Back To Top ^^

Most recommended behavioral finance book

Based on a recent vote of the Behavioral Finance Member Community, the most recommended book on Behavioral Finance is "Misbehaving: The Making of Behavioral Economics” by Richard Thaler.

Thaler, a world-renowned economist and professor at the University of Chicago's Booth School of Business, recently won the Nobel Prize for Economics in 2017. According to one of the book's many translators, “The book builds on Thaler's work as a Behavioral Economist in trying to present an alternate viewpoint that humans bring along behavioral biases, are error prone, and are not always rational.” This viewpoint builds on his work from his previous book, “Nudge,” published in 2008. Thaler ties this to the effect on markets, which are otherwise expected to be efficient.

Thaler uses the book to inform readers about how behavioral economic analysis can help look at areas ranging from household finance, TV shows, NFL drafts and emerging disruptive businesses like Uber, in a new light.

The Behavioral Finance Member Community will submit our highlights and favorite insight in the next issue of the CFA Society Los Angeles E-Newsletter.

CFA Los Angeles Applied Behavioral Finance Member Community: Scott Laudeman (Chairman), Jim Altenbach, Larry Brody, Rishin Doshi, Mark Harbour, Luke Kulma, Michael Lovelady, Sam Miller,  Andrés Ochoa, and Jonathan Rugg. For questions about this article or information about the Applied Behavioral Finance Member Community, please contact Scott Laudeman here.  Back To Top ^^     

The old allure of new money 

In this Project Syndicate commentary, 2013 Nobel Laureate in Economics Robert Shiller shares his perspective on what may be behind the public’s fascination with cryptocurrencies. Citing several examples of past failed monetary innovations, Shiller offers his take on whether the cryptocurrency revolution has the potential to be any different. Read more...  Back To Top ^^    

Where are all the quick wins for blockchain

In this Association for Financial Professionals podcast, BusinessBlock Managing Director Tom Klein urges treasury managers to start seeking benefits from blockchain technology over the next three to six months, rather than continuing to wait five to seven years. Read more...  And more...  Back To Top ^^    

why we need to update financial reporting for the digital era

With the market caps of just four companies -- Apple, Alphabet, Amazon, and Microsoft -- exceeding $3 trillion, can financial statements capture the value created by modern digital companies? In this Harvard Business Review article, scholars at Dartmouth's Tuck Business School and Columbia Business School share seven key insights, distilled from interviews with the CFOs of leading technology companies and the senior analysts who follow those companies. Read more... And more... Back To Top ^^   

Remember When Tech Earnings Were Going To Be More Straightforward?

In this 2016 article, Investors Business Daily columnist Jim Nash recalls the fierce debates over non-GAAP metrics that took place during the final quarters of the 1999-2000 dot-com bubble.  Read more... Back To Top ^^  

Where Humans Meet Machines: Intuition, Expertise and Learning

MIT Initiative on the Digital Economy Director Erik Brynjolfsson interviews 2002 Nobel Laureate in Economics Daniel Kahneman about the perils as well as the potential of machine-based decision-making.  Read more... And watch this... Back To Top ^^ 

Amazon has Already Begun Automating its White-Collar Jobs

Quartz Artificial Intelligence Reporter Dave Gershgorn discusses the impact of Amazon's algorithm-driven demand forecasting and vendor-negotiation project, and its similarly automated Amazon Marketplace e-commerce platform on retail buyer jobs. Read more... Back To Top ^^ 









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