How to Measure Nature Risk?
In June 2024, Dawn Lalonde, a beekeeper in northern Ontario noticed a sudden die-off of about a million bees. The bee die-off affects much more than the amount of honey she can collect from her hives. Without bees, local crops and orchards do not get adequately pollinated, leading to lower yields. This is but one recent example of a type of risk coming into new prominence in business and economics: nature risk. Nature risk, the loss of things in the world not created or domesticated by humans, affects businesses and economies directly, by impacting operations such as lack of pollination, […]
Carbon Pricing
What is the best way to address climate change? If too much carbon is released in the air, how can emissions be reduced? By regulating corporations or by imposing costs on consumers in the form of a carbon tax? Moreover, even if a solution is found, not all nations, and not all people within nations, will agree on how to tackle the problem. In the words of Professor Barry Rabe, author of Can We Price Carbon? “Compelling ideas from economics do not necessarily suspend the laws of politics.” On May 4, 2023, Jessica Green, professor of political science at University […]
E-Growth in Emerging Markets
What is happening in emerging markets? Are there areas where an informed investor can make a profit? What are the pitfalls to avoid? On November 22, 2022, the CFA Society of Toronto hosted a virtual webinar, “Rethinking Emerging Markets: The Case for Growth & How to Capture It.” The speaker was Kevin T. Carter, the founder and Chief Investment Officer of EMQQ Global. Carter began by providing his background. “I pray toward Omaha,” he quipped, because he considers himself an active “value” investor first and foremost, along the lines of “the oracle of Omaha,” Warren Buffett. Carter has collaborated with […]
Carbon, Cargo, Covid
As we slide into summer 2022, what are the big factors affecting the markets? Carbon, cargo, Covid. Governments and companies are starting to address the excessive carbon dioxide that is causing climate change. Interruptions of the supply chain, heavily dependent on cargo ships, continue to worsen operational risk. Meanwhile, the global economy is still dealing with the Covid-19 pandemic. On May 2, 2022, Derek Walter, head of the Institutional Asset Management Committee at the CFA Society Toronto, moderated two panelists during a webinar to discuss the underlying drivers of market changes. “We need to separate the short-term from the long-term […]
But What About Inflation?
Now that the worst of the Covid pandemic appears to be over for North America, inflation has kicked in and investors everywhere are on guard. Is the inflationary trend here for the long term? What, really, lies at the root of this particular instance of inflation? Moreover, what is the best hedge against inflation? On April 4, 2022, James Montier, a member of the Asset Allocation Committee of the CFA Society of Toronto, gave a one-hour webinar on “Hedging Inflationary Risk.” He is the author of three market-leading books: Behavioral Finance: Insights into Irrational Minds and Markets, Behavioral Investing: A […]
Ethical Decision Making
Question 1. Do you think that one’s belief system triggers one’s actions? Or does one act and then justify one’s actions by changing one’s beliefs? Question 2. Is an effective leader one who adheres to a constant belief? Or is the effective leader one who adheres to “situational ethics”? These are two dilemmas that were explored in more depth on February 8, 2022, when Kevin Veenstra, Associate Professor at De Groote Business School at McMaster University, presented a virtual workshop on ethical decision making to members of the CFA Society Toronto. Veenstra’s research focuses on personality and unconscious motives and […]
Access to Alternatives
Alternative assets are an important part of modern portfolios—but how can you gain access to them? Do investors and investment advisors know what alternative investment options exist, and what platforms provide them? Do advisors know how to use modern investment platforms to differentiate their offering and provide unique opportunities? How can this type of access on the new platforms enhance the business asset managers? Four panellists convened on October 26, 2021, to discuss these aspects of alternative assets, in a webinar sponsored by the Canadian Association of Alternative Strategies & Assets (CAASA), a trade association representing alternative investment managers, service providers, and investors. The […]
Starting an Alternative Desk
When a finance company is starting up an alternative fund, the managers may have been isolated from the day-to-day tasks such as trading and execution, fund administration, and cyber security. Where does one begin, and how does one prioritize? “Often the IT is overlooked. Some people think they just need a Bloomberg terminal,” said Robert Strawbridge, Vice President, Head of Canada at Options IT, a global leader in fintech managed services, colocation, and cybersecurity. His firm can step in to help. “We manage the cloud services. We do everything but the trading.” Strawbridge was one of four panellists who convened […]
The future of active management
“Active portfolio management is futile,” say some who watch the progression of the financial industry. “Active managers only randomly outperform the stock market as a whole.” Is this true, or have the rumours of its demise been greatly exaggerated? On June 10, 2021, Philip Young, CFA, welcomed a webinar audience on behalf of the CFA Society of Toronto to consider this very question as they listened to Ronald Kahn, Managing Director, and Global Head of Systematic Equity Research at Blackrock, the world’s largest asset manager. He recently co-authored the book Advances in Active Portfolio Management: New Developments in Quantitative Investing. […]
Death of Fundamental Analysis?
Have you been following the market frenzy around stocks for GameStop, AMC and Bed Bath & Beyond? Or the news on Wall Street Bets and Robinhood? How disruptive are these events for traditional valuation methods? What new factors must be considered when investing and allocating capital? Recent shifts in market dynamics have altered the perception of capital markets in meaningful ways. On April 8, 2021, the Corporate Finance Committee of the CFA Society of Toronto convened a panel of experts to discuss the reasons market valuations are so out of synch with fundamental analysis. Moderator Stephen Foerster, Professor of Finance […]