CFA Society Minnesota Annual Dinner Recap

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By Claire Underhill, undergraduate Finance major at the Carlson School of Management. Claire is also on the Healthcare team of the Carlson Growth Equity Fund, and has been involved with the program on a volunteer basis for over a year. 

The 2019 CFA Society Minnesota Annual Dinner featured a conversation with author Bethany McLean, moderated by Andrew Rem, CFA (CFA Society of Minnesota Board member), and aided by Past President Josh Howard, CFA. McLean is currently a contributing editor at Vanity Fair, and has also written multiple books such as “The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron.” The evening featured a wonderful discussion as McLean tracked the progression of her career from starting as an analyst at Goldman Sachs, to joining Fortune Magazine as a fact-checker, which ultimately led to her first novel and current role.

Her latest work, “Saudi America: The Truth about Fracking and How It’s Changing the World,” explores the economics around fracking. McLean is skeptical of the drive for energy independence, and makes the case for how fracking might change the geopolitical landscape – though not in the way you might think.

Throughout her career, Mclean has documented multiple instances of business gone wrong and has learned a few things about what she calls “the progression of rationalization.” She talked about the need we have as a society to find who the bad guys were in the wake of crisis, and punish those responsible. Oftentimes, though, the world is not so clear-cut. The line between a visionary and a fraudster can become blurred by the complex human drama and emotions that naturally surround the process of building something innovative. McLean’s key tool in deciphering these dramas? Curiosity. When asked about how she gets people to talk to her, McLean stated that being genuinely interested in what people have to say goes a long way. Through this approach, McLean has developed a unique lens for people who have crossed ethical lines. Good people taking gambles to cover-up for their last mistake. Powerful culture that inflates egos.  

What can be done to fix these problems? McLean said the challenge with regulation is that it is always backward looking and often lacking in imagination. Regulators are always stuck trying to fix yesterday’s problems without the ability to predict what might happen next. Furthermore, even if all accidents are prevented, McLean argues that creativity would also leave the system. This system has failed in front of McLean many times, yet she still views business as a signal of hope. After spending so much time writing about unethical behavior, McLean describes herself as a skeptic, not a cynic, and loves to see the transformative power that business can have in a community.

Managing Me Event Recap

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By Matt Chruscielski, Society intern, recent University of St. Thomas MBA graduate and CFA level III candidate

It’s a new year which means it’s time for resolutions to become better versions of ourselves. One thing I’m sure we all struggle with is managing our time. Much like losing ten pounds, it’s something many of us want, but few achieve. Balancing time between family, career and ourselves can seem like we are on a treadmill repeating the same steps over and over without getting closer to our long-term goals. In the Managing Me session put on by CFA Society Minnesota last week, University of Minnesota, Carlson School of Management Professor, Arthur Hill, talked about how it is possible to identify the trivial things that eat up our time. Time that could be spent doing the important tasks on our to-do list.

In the hour session, Professor Hill led an engaged audience through an interactive presentation on the six steps to better manage ourselves: aim, sort, select, do, review and break, all summarized below. Professor Hill’s process encourages one to write on sticky notes to help visualize the steps and ideas, because what’s in our heads does not seem as daunting once it is written down.

Aim: Define roles and responsibilities. Set daily, weekly monthly and longer-term goals that are regularly assessed. Schedule more difficult tasks early in the day and save easier or favorite tasks for later making up energy with passion.

Sort: Process inputs through filters to assess when to respond. Professor Hill described six filters related to how valuable, actionable, incremental, outsourceable, timely and capable the input is along with a filter for new projects.

Select: Use goals to pick the best task from the list. Only consider tasks that we have the time, energy and tools to do in the present. Prioritize tasks based on importance and urgency. Avoid multitasking when we are trying to complete a task that has a high cognitive demand.

Do: Complete selected tasks with focus and discipline. Focus on just a few goals. Take breaks but avoid distractions and interruptions as it can take up to ten minutes to get fully focused once disturbed. Avoid reading emails first thing in the morning. Emails can quickly derail a day as some of the audience attested to having over a thousand emails unread emails that day.

Review: Reflect, evaluate, celebrate and improve. This is to help with Aim. Did we take a step closer to goals this day, week, month? What did we learn? How can we improve? This is where we can keep track of our habits and create new ideas the next time we Sort. Don’t forget to celebrate reinforcing the good habits we want.

Break: Take breaks to recharge both at and away from work. We need to take regular breaks to replenish our attention and refresh our energy throughout the day. Pursue activities that boost energy. When away from work, really unplug. Don’t sneak a peek at the work email. Live in the moment and enjoy the time with family and friends. Work on a hobby or new skill to keep the mind fresh.

Overall, the session provided helpful tips and tools, and will hopefully allow for better time management in 2019. As Professor Hill said, “we are all guilty of letting ourselves get overwhelmed by the amount of noise in our lives which is why it is so important to have someone teach us how to filter out the small things so that we can focus on what really matters.” Judging by the large crowd in attendance it seems we all can use a friendly reminder now and then.

Event Recap: AI and Machine Learning in Investment Management

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Rick Roche, CAIA, of Little Harbor Advisors, entertained a full house as he presented an overview of Artificial Intelligence and Machine Learning in the Investment Management Industry. The audience was diverse, ranging from industry veterans to a Senior in High School (I must admit that I wasn’t as forward-thinking at his age). For Mr. Roche this was a homecoming of sorts, having lived in Linden Hills for 22 years before moving to Boston last year.

Though Artificial Intelligence and Machine Learning is complex and often begs to be gone through with fine detail Rick presented a view that was “a couple feet deep and a mile wide” – for the 43rd time in the last 13 months we were told. The hour ranged from 1) a history lesson of Machine Learning to 2) the fascinating amount of data and capabilities currently available and 3) some thought provoking views of the disruption that may (will?) be caused by the uprising of the machines and those who run them.

Mr. Roche parroted Gary Kasparov in his book “Deep Thinking”, where he reflected upon losing to IBM’s “Deep Blue”, blaming it on “Losing emotional control … and never getting it back” — for those in the investment industry this emotional control may strike close to home. That the Wealth Management industry is a laggard when it comes to the adoption of the advanced techniques (as reported by PricewaterhouseCoopers) is odd as it has two of the key ingredients necessary to foster the revolution, high margins and emotional participants. A quick poll of the audience seemed to support this idea that the industry lags behind as only about a quarter of those present had some exposure to machine learning with most of these having only done some light reading on the topic.

As a CFA charterholder, and someone who is not looking to be displaced by a robot in 10 years, some of the more riveting aspects of the presentation focused on the world around me, including:

  • Algorithms developed through Machine Learning techniques account for more than 98% of the trades happening on Wall Street and have sped up to the rate where 40,000 trades can now execute in the time it takes to blink our eyes.
  • By 2025, 163 Zettabytes of digital data will be available (roughly equivalent to the storage capacity of 635 billion of the top of the line iPhones) — to put this in comparison it is estimated that the totality of human speech in all of history would cover 42 Zettabytes (if digitized as 16 kHz 16-bit audio).
  • Algorithms have been developed to understand how much fuel is being transported based on reviewing satellite images to see how low tankers sit in the water.
  • The keywords of “Data Scientist” are bigger than “Quant Analyst” and “Fundamental Analyst” on Indeed by a factor of three, and growing
  • More than half of the people surveyed would consider becoming a client of Google, Apple, Facebook or Amazon if they were to offer wealth management services — and this number increases if you were to ask Millennials and those with over $20MM net worth.
  • Alibaba has the World’s Largest money market fund

In the words of the legendary investor, Paul Tudor Jones, “No man is better than a machine. And no machine is better than a human with a machine”. In the words of another legendary investor, BlackRock co-founder Robert Kapito, “Apple was not in music industry, Google was not in mobile phones, and Amazon was not in groceries — until they were”. Mr. Roche’s presentation highlighted the risks for those who are not willing or able to transform and inspired those who are willing and able to become, what he called, a Computerized Financial Analyst.

That we came together on Halloween and enjoyed a Thanksgiving feast may be a bit of a foreshadowing that blending two seemingly foreign concepts, humans and computers, can work if you sent apart your preconceptions and embrace it.

For those who were unable to come to the event, and for those who would like to see it a second time, please watch the video through the link below. For those who are interested in the topics of programming, machine learning, artificial intelligence, etc. please send an e-mail to the Society (events@cfamn.org).

View the session video here:
https://penxy.com/widget/?e=xelol

-Tom Crandall, CFA

Articles Referenced:

Asset Management Firms are Laggards in ML Adoption

Asset & Wealth Management Revolution: Embracing Exponential Change

2018 CFA Societies Compensation Survey – results released for MN, ND and SD

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CFA Societies Financial Compensation Survey Results - Minnesota, North Dakota and South Dakota

[This replaces an earlier post with incorrect links]

CFA Society Minnesota is pleased to release the findings from our fifth Financial Compensation Survey for Minnesota, North Dakota and South Dakota. Click the image to download, at no charge, this white paper summarizing high-level survey findings in an easy-to-read format. In return for the white paper or for deeper data requests, please complete the contact form below. Your feedback is welcome and appreciated.

As in the past, we expanded the survey to other CFA Societies – this time, across the entire US. Watch for a consolidated report in the coming weeks summarizing results for nearly 6,000 respondents from coast to coast and border to border.

If you’d like to download copies of our previous MN/ND/SD survey results, please use the links below.

2016

2015

2014

2013

Thanks for your interest!

University of Wisconsin-Eau Claire Financial Management Association Visit

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Written by Members of the University of Wisconsin-Eau Claire Financial Management Association 

The University of Wisconsin-Eau Claire Financial Management Association (FMA) takes time out of their regular class schedule to go on an annual trip to visit finance professionals in the Twin Cities. This trip gives FMA members an opportunity to see a wide variety of careers within the finance industry. This year FMA partnered with CFA Society Minnesota (CFAMN) to line-up firms for the students to visit in Minneapolis and St. Paul. CFAMN put together an outstanding day filled with real-life experiences. Students attended five incredible presentations from: Wells Fargo/Wells Capital Management, Nuveen Asset Management, Royal Bank of Canada, Mairs & Power and Northwest Area Foundation. We can’t thank CFAMN enough for giving our members this experience!

Nuveen Asset Management brought the group up to their executive conference room. Below is a list of the professionals FMA had the opportunity to learn from:

Andrew Rem, CFA – Vice President, Portfolio Manager, Senior Research Analyst
Sarah Wade – Senior Vice President, Co-Portfolio Manager
Laura Starr, CFA – Senior Vice President, Senior Research Analyst
Derek Sadowsky, CFA – Vice President, Portfolio Manager
Julie Lenarz – Assistant Vice President, Operational Manager, NAM Legal and Risk
Benjamin Duininck, CFA – Vice President, Senior Research Analyst

Hearing from each one of these individuals provided our group with key insights not readily available within the classroom setting. Some of these insights included:

  • How a research analyst’s day is never the same. Some days you are diving into spreadsheets and creating models or other days you are flying around the country visiting corporate executives.
  • The role of psychology in finance and understanding the emotions of the market.
  • The retail industry and how to think about companies when researching them.
  • The importance of tools such as FactSet and Bloomberg and selling within this industry.
  • How risk management and compliance are crucial in daily activities of the industry.
  • How much larger the fixed income market is than the public equity market, which was a shock to a lot of people.

We were able to hear from professionals that are in positions we hope to be in someday. It was exciting to hear about how their day-to-day activities correlate with topics we are learning in school and gave our group a lot to look forward to!

At the Royal Bank of Canada, we had a phenomenal opportunity to have breakout sessions and discussions with different parts of the firm. We heard from these professionals:

Marcia Morgan – Vice President, Business Technology
Christy Bipes – Senior Manager, Marketing and Communications
Josh Schettle, CFA – Sr. Investment Risk Analyst
Carol Kuha, CFA – Chief Operating Officer
Tiffany Mlsna – Analyst, Portfolio Administration
Kelly Foley – Junior Credit Analyst
Mindy Frye – Associate Portfolio Manager – Impact Investing
Nick Walstrom – Director, Product Management
Craig Bishop – Vice President, Lead Strategist U.S. Fixed Income Strategies Group
Sam Renikoff – Fixed Income Portfolio Associate
Bob Dickey – Technical Analyst
Peter Kolar, CFA – Wealth Management Consultant

The breakout sessions were an extremely valuable opportunity with departments including business technology services, portfolio management, fixed income, investment risk and performance department. During this session, we broke into small groups of four to six, and had the opportunity to meet with multiple professionals from these departments for 10 minutes. Many people enjoyed the opportunity, mainly because we had the chance to get to personally know everyone in each of the departments, walk through their day-to-day lives and ask them questions. They provided career advice, what RBC has to offer and possible careers with the firm.

The next session we had was a discussion with the wealth management group. We talked with a technical analyst, a research analyst and a financial advisor consultant. Many students took advantage of the opportunity as a way to see aspects of research and advising, which  led to a very positive, interactive and educational session. We talked about aspects such as understanding risk, what technical analysis is and what it is like to be an advisor. Overall, the students really enjoyed the opportunity to go to RBC. The firm was very engaging and interesting, and we would thoroughly enjoy visiting them again.

Our speakers at Wells Fargo/Wells Capital Management gave us an overview of several different jobs within the company.

Matt Grimes, CFA – Managing Director
Jeanine Sundt – Investor Relations Manager
Jake Seltz, CFA – Portfolio Manager, LT Large Cap Growth Equity
Kashi Yoshikawa, CFA – Senior VP, Regional Investment Manager

They talked about the company’s mission, principles, and goals for their clients. We learned about short duration fixed income, investor relations, large cap growth equities, building portfolios for clients, and maintaining client relationships. They also provided us information on the CFA Charter and the importance of having that designation in the industry.

Mairs & Power provided a unique opportunity to see a firm that doesn’t operate as the traditional investment firm. Seeing the unique hands-on and interactive investment strategy that they have incorporated for the past several decades offered insight that many students would not have had the opportunity to ever experience if it was not for the visit. This opportunity showed us that there are creative ways to create profitable investments year over year, and I know many of the members of our organization walked out with a more creative insight on investing. At Mairs & Power, we had the opportunity to meet with:

Ron Kaliebe, CFA, CIC – Senior Vice President and Director of Fixed Income
Allen Steinkopf, CFA – Co-Manager of the Mairs & Power Small Cap Fund
Kelly Trevenna – Equity Trader/Assistant Portfolio Manager
Heidi Lynch – Fixed Income Trader

Each member walked us through what they do daily and provided insight into the firm. The Q & A session was filled with great questions that provided a lot of knowledge to all our members. We are thankful for the opportunity to experience such an amazing company such as Mairs & Power.

At Northwest Area Foundation, we learned about what an investment director does on a day-to-day basis. Our speaker, Amy Jensen, CFA – Investment Director, is responsible for investing the foundation’s assets to make sure they can provide grant-making in the future. We also talked about the importance of behavioral finance and how to build an institutional investment portfolio. After the presentation, we were able to compare two potential investments and decided which one would be better for the company. Amy also touched on what the CFA Charter has done for her and what it is like to be a woman in the finance industry.