CFA Society Pittsburgh Newsletter #22

Happy Holidays! Chris Wiles has outlined in this newsletter information about recent and upcoming programs that he has lined up for the Society. We have incredible programming! Please take advantage of the great professional and networking events we host!

Good news! For the third year in a row, the CFA Institute has approved an application I submitted on behalf of the society for project (formerly, growth) funding for our financial literacy efforts. We will receive approximately $11,000 in our efforts to increase financial literacy outreach in Western Pennsylvania! Gene Natali and his financial literacy committee (with well over 40 participants) has a slew of presentations forthcoming in the months ahead including with the Alleghany Intermediate Unit and at Robert Morris University. Xin (Jessica) Zhao and I have co-authored an academic paper sharing the results of our efforts last year.

Congrats to Joe Lantz on securing a market strategy grant for our society as well. His efforts garnered over $6,000 for our society to promote the CFA Institute brand in the greater Pittsburgh area.

Watch for more information forthcoming about a "Putting Investors First" initiative spearheaded by George Emanuele. PartnershipErie, based out of Penn State Behrend, is designing a website that will allow members to sign a pledge for principles established within this CFA Institute initiative.

The annual candidate information session on December 7th went very well - we had candidates in attendance across all three levels of the CFA exam. This free luncheon offered study tips across all three levels of the exam and allowed candidates to sign up for study groups which will be formed this month.

The Market Outlook Conference is our largest event. With five sponsors, we anticipate a record crowd! If you haven't reserved your spot yet, make sure you do soon!

As always, if you have any questions or concerns, please do not hesitate at contact me at [email protected].

- Dr. Greg Filbeck, CFA, FRM, CAIA, CIPM, PRM

President, CFA Society Pittsburgh

Upcoming Events

Market Outlook Dinner

Please join us on

Wednesday, January 11, 2017 for our annual Market Outlook dinner at The River's Club.

Investors face many risks and opportunities as we look ahead to 2017 and beyond. The CFA Society of Pittsburgh has assembled a distinguished panel of experts who will share their insights about the global economy and the markets.

5:30 P.M. Cocktails and hors d'oeuvres

6:00 P.M. Dinner

6:30 P.M. Presentation

Our Panelists:

Ed Clissold, CFA - Ned Davis Research Group

Ed Clissold is the Chief U.S. Strategist for Ned Davis Research Group. He and his team are responsible for the firm's U.S. equity, asset allocation, style, sector and theme analysis. They use a combination of top-down macroeconomic analysis as well as bottom-up fundamental analysis. Ed also writes the firms U.S. Strategy and is often quoted in the Wall Street Journal and Barron's. Prior to joining Ned Davis Research in 2002, Ed worked at Strong Capital Management and J.C. Bradford & Co. Ed is a chartered financial analyst, holds an MBA from Indiana University and a Bachelor's degree from Transylvania University.

Ron Muhlenkamp, CFA - Muhlenkamp & Co

Ron is the founder and president of Muhlenkamp & Company, Inc., established in 1977 to manage private accounts for individuals and institutions. In 1988, Muhlenkamp & Company launched a no-load mutual fund. Ron's entire business career has been devoted to the professional management of investment portfolios. In addition to publishing his quarterly newsletter, Muhlenkamp Memorandum, Mr. Muhlenkamp is the author of Ron's Road to Wealth: Insights for the Curious Investor. Mr. Muhlenkamp received a Bachelor of Science degree in Engineering from M.I.T. in 1966, and an MBA from the Harvard Business School in 1968.

Bill Stone, CFA - PNC Asset Management Group

Bill Stone is executive vice president and chief investment strategist for PNC Asset Management Group. He is responsible for leading the strategy teams in monitoring the factors that influence the direction of domestic and international financial markets. Bill is a frequent guest on financial news networks and is often quoted in the financial press. Bill joined PNC in 2000, prior to that he worked for Salomon Brothers and Smith Barney. Bill is a Chartered Financial Analyst and has a Bachelor's degree from the University of Dayton, and an MBA from the University of Pittsburgh.

Richard Weiss - American Century Investors Richard Weiss is senior vice president and senior portfolio manager for American Century Investments. Richard is co-portfolio manager for the firm's asset allocation strategies. Prior to joining the firm in 2010 Richard was chief investment officer at City National Bank responsible for investment policy and strategy for their $12 billion portfolio. He also held positions at Sanwa Bank California, Vantage Global Advisors, TSA Capital Management, PaineWebber, and Mellon Bank. Richard holds a Bachelor's degree from the Wharton School at the University of Pennsylvania, and an MBA from the University of Chicago.

Our Moderator

Chris Wiles, CFA - Rockhaven Capital Mgmt.

Chris Wiles is the founder and chief investment officer of Rockhaven, a Pittsburgh based wealth management firm, specializing in asset allocation strategies and equity-income portfolios. Chris also teaches security analysis at Duquesne University. From 1997 to 2009, Chris led a team that managed large-cap portfolios and mutual funds for National City Bank, Strong Capital Management, and AmSouth Bank. Prior to that Chris managed portfolios for Federated Investors and Mellon Bank. Chris is a Chartered Financial Analyst and received a Bachelor's degree from Youngstown State University and an MBA from Cleveland State University.

This years sponsors are:

FactSet, Fidelity Investments, American Century Investments, PNC Wealth Management, and T. Rowe Price.

You can get your Reservations by clicking here.

Highlights from Recent Events

Real Asset Investing:

Lies, Damn Lies, and Statistics

On Wednesday, December 14th , we welcomed Pittsburgh native, Michael Underhill, of Capital Innovations back to the 'burgh to share his observations on the markets.

Michael is responsible for overseeing all aspects of Capital Innovations investment process and is focused on the strategic direction of the firm.

Michael expressed his views that the level of Economic uncertainty is at record highs, and the outlook for inflation and higher interest rates is certainly up.

He also believes that although President-elect Trump and President Reagan may have some policy similarities, Mr. Trump is inheriting a vastly different economy and markets. Namely both debt levels and market valuations are at record levels.

He believes that portfolios should be structured fairly defensively with a diversified mix of assets that do relatively well in an inflationary environment, such as; TIP's, Commodity Stocks, REIT's, and Precious Metals.

Click Here for a copy of the presentation.

"Overview of CFA Exam and Study Strategies for Success":

On December 7th, our President, Dr. Greg Filbeck, lead a lively discussion for prospective CFA candidates at The Duquesne Club.

Greg gave an overview of the CFA program along with study strategies to enhance opportunities for success on exam day.

The Case for Negative Interest Rates

On Wednesday, November 9th

(the day after the election!), we were fortunate to have

Dr. Marvin Goodfriend of CMU join us.

Dr. Goodfriend is the Friends of Allan Meltzer Professor of Economics at Carnegie Mellon's Tepper School of Business, where his teaching and research focus on macroeconomic fluctuations, money and banking, international finance, and economic development.

Dr. Goodfriend also has close ties to most of the worlds Central Banks, and has given advice to many of them. His most recent presentation was delivered at the Federal Reserves annual Jackson Hole Symposium in August. For a copy of the entire presentation please click here.

Even though it was the day after the election we were able to keep most of the presentation on point. Dr. Goodfriend argues that in most recessions the Federal Reserve needs to cut interest rates by 4-5% in order to reinvigorate the economy, and with rates already so low, during the next recession we'd probably be looking at a negative 1-2% interest rate target.

He also said that, "It is questionable whether such persistently negative interest rates would be feasible in the face of current institutional arrangements which accommodate the demand for paper currency." In other words, the U.S. would have to do something about cash because people would withdraw their cash from the banks instead of seeing its value eroded on a daily basis. His suggestion is to make the value of the paper currency float.

To be clear, Dr. Goodfriend is not a fan of negative interest rates and is certainly not in favor of eliminating cash, but he thinks it is the better alternative to more quantitative easing where the Fed buys up all manner of bonds and even stocks. He believes the Fed has already lost its political independence because of these massive QE programs, and that allowing negative interest rates is the lesser of two evils.

A thoroughly fascinating discussion of what is currently on the minds of our Central Bankers.

Annual Partner Sponsors

CFA Society Pittsburgh would like to thank its partnership sponsors for their support of the Society.

Silver

Stock Pickers Contest

Update - 2/17/16 - 12/16/16

Contestant	Avg.	STK 1	STK 2	STK 3
S&P 500	17.19%
Malcolm Polley	63.87%	NSR 46.97%	LOCK 131.01%	WEB 13.62%
Kim Caughey	44.45%	PNC 36.66%	NTCT 61.01%	RPM 35.69%
Mike Halloran	19.11%	C 50.20%	GILD -17.08%	KMI 24.21%
Chris Teachout	31.45%	KMPH -78.65%	SLCA 196.73%	CMG -23.74%
Bob McGee	-3.02%	CNC -1.91%	EPAM 3.28%	CEA -10.44%