CFA Chicago Annual Dinner: 28th Annual Dinner

CFA Chicago Annual Dinner Keynote: Governor Jon Huntsman, Jr.

CFA Society Chicago celebrated a class of 140 new charterholders during the CFA Chicago 28th Annual Dinner held at the Navy Pier Grand Ballroom. The festivities commenced at 5 p.m. with networking and drinks. Prior to the start of dinner, entertainment was provided by the City Lights Quartet.

CFA Chicago Chairman Christopher Vincent, CFA, opened the proceedings by welcoming the new CFA charterholders and thanking the dinner underwriters. There were 53 corporate sponsors (45 bronze, 2 silver, 8 gold, 4 platinum and two premier sponsors) for this event.  The premier sponsors were Harris Associates and UBS Global Asset Management.  Each new charterholder attended gratis, courtesy of CFA Chicago.  The event greatly benefited from the organizing efforts of Doug Jackman, CFA and Stephen Moy, CFA who lead the Annual Dinner Advisory Group.

The winner of the 2014 Hortense Friedman, CFA, Award for Excellence was Ralph Wanger, CFA.  This award honors a CFA Chicago Founder and prominent institutional investor.  Ralph Wagner began his investing career with Harris Associates in Chicago in 1960.  He is currently Head of Columbia Wagner Asset Management, L.P. and is an Advisor to the Acorn Fund.  In his brief remarks, Wagner reflected on his long career and the people in Chicago he met along the way.

The evening continued with a keynote address by Governor Jon Huntsman, Jr.  Gov. Huntsman has led a life devoted to public service.  He was twice voted Governor of Utah (2005-2009), and was U.S. Ambassador to China (2009-2011).  In 2012 Huntsman ran as a candidate for the Republican Nomination for President.

In an era of increasing ideological paralysis in politics, Gov. Huntsman stressed that bipartisanship is the only way to move forward to solve the problems of the United States.  He now serves as co-chair of No Labels, a citizen’s movement of Democrats, Republicans and others dedicated to promoting a new politics of problem solving.  In his opinion, the major challenges facing the US can be summarized by the following four issues; 1) Entitlements 2) Budget Deficits 3) Energy Security and 4) Jobs Security.

He stressed the importance of the mid-term elections and the fact that 42% of voters are now calling themselves unaffiliated. He predicted that the Republicans would gain control the Senate; however this did not mean that the ideological paralysis would go away.  Dissatisfaction with incumbents has skyrocketed because no viable solutions are being offered.

In the short Q&A following the event, Gov. Huntsman commented on the state of the Republican Party, and the role of China and the US in the global economy.  He fears that the Republican Party has lost its connection to its Lincoln, Eisenhower and Reagan roots.  His opinion is that in the global marketplace it is China who takes the long view, while the US is more focused on short-term results.  His best example of a leader in the world today is Alan Mulalley former CEO of Ford, who led his company through trying economic times.

Following Gov. Huntsman’s keynote address and Q&A, there was more opportunity for networking. Drinks, coffee and cookies were provided to attendees who wished to stay after dinner.

 View Photos from the 2014 CFA Chicago Annual Dinner

Thank you to our Premier, Platinum, Gold, Silver and Bronze Sponsors.

 

Claritas Prep Program

Claritas is a Latin word which in English denotes clarity or brightness. The CFA Institute began the Claritas Investment Certificate as a global education program designed to give a clear understanding of the essentials of the investment industry. This program is geared toward all professional disciplines not including those who are investment decision makers.  There are no education or experience requirements needed to enroll.

On Sept. 10, 2014, CFA Society Chicago kicked off the Claritas Prep Program.  The program is being taught by the following instructors:

Michael Falk, CFA – Falk is a partner at Focus Consulting Group and teaches as an adjunct professor at DePaul University in their Certified Financial Planner program.

Joseph Vu, Ph.D, CFA – Vu is an associate professor of finance at DePaul University, he has also taught at the University of Chicago.

Andrew Kominik, CFA – Kominik joined William Blair & Co in 2003, his current role is as a quantitative portfolio analyst serving equity management teams.

Brian Langenberg, CFA – Langenberg serves on the Career Management Advisory Committee and is adjunct professor of finance at Southern New Hampshire University.

There were approximately 40 participants gathered for the first class who were welcomed by Michael Falk, CFA. Falk had prepared 70 slides to cover the first four chapters (Module 1) of the prep course. The CFA Chicago Fundamentals of Investing Course has been adapted and used as a guide for developing the new Claritas Prep Program. Each candidate is supplied with an e-book and hard copy of the instructors’ presentation.

The course will be 7 weeks in length and consist of 7 modules (2-4 chapters) followed by a mock exam on the 8th week.  The 7 modules aim to cover the essential characteristics of all aspects of the investment industry.  It is estimated that 80-100 hours of study will be required over a 3-6 month period to prepare for a 2-hour multiple choice exam.

The successful completion of the course and the attainment of the certificate will benefit both the employee and the employer.  The shared understanding of the “big picture” will improve performance of investment teams.  Holders of the Claritas Investment Certificate will attain knowledge above their peers and demonstrate a commitment to the industry.

Distinguished Speaker Series: Rick Rieder, Managing Director, BlackRock

The Distinguished Speaker Series hosted Rick Rieder whose other duties include Chief Investment Officer of Fundamental Fixed Income for BlackRock and Chairman of the BlackRock Investment Council. BlackRock is the largest asset management firm, now managing over $4.3 trillion for clients worldwide.  In 2013 Mr. Rieder was inducted into the Fixed Income Analyst Society Hall of Fame.  He was introduced by James Franke, Co-Chair of CFA Chicago Distinguished Speaker Series Advisory Group.

Rieder’s presentation was entitled “The New Economic and Investment Regime”.  His thesis is that economic forecasting and investing is now dependent on the following four critical factors; 1. Demographics, 2. Leverage, 3 Technology, and 4 Monetary Policy. He went on to demonstrate how each of these factors works to influence the economy and therefore interest rates. His thesis is that growth will be slow and the yield curve will continue to flatten.

Rather than simply alluding to an aging population, Rieder pointed out the employment problem and the financial burden of high student debt on the younger population. The demographics lead him to conclude that current consumption and spending trends will remain low. The implications of leverage in developed and emerging markets point to the continued availability of cheap financing. Rates in the US and UK could grind higher in the context of a flat yield curve. Rieder concluded that technology has created the biggest headwind against inflation and will continue to suppress levels of employment.   With respect to monetary policy, Rieder points out that an important by-product has been that long-dated Treasuries have become scarce due to less supply needing to be issued, continued strong foreign buying and demand for long-dated assets from pension funds and insurance companies.

Rieder concluded by suggesting which asset classes have the best potential for appreciation.  He strongly recommended long-dated municipal bonds as there is very little issuance.  Short dated ABS and CLO’s are also attractive in this environment. Rieder is bullish on the equity market given the cheap financing presently available to corporations, he predicts this will persist.

There was a brief question and answer period following the presentation. On the question of what affect exiting QE might have on the capital markets, Rieder stated that although history says differently, he did not think a big equity sell-off would occur. In response to another question, he thought that high-yield was fundamentally sound and although there would be a pause, it would not suffer big outflows.