CFA Society Hungary

Investment practitioners can better anticipate and manage the complexities and disruptions that characterize today's dynamic environment by considering the range of plausible outcomes, according to Sebastian Petric, CFA. Systemic disruptions compel us to confront the inherent unpredictability of the future through scenario planning and foresight, both of which prioritize imagination.

Scenario Planning, Foresight, and the Power of Imagination: Navigating an Uncertain Future By fostering resilience through the consideration of various outcomes, investment practitioners can better anticipate and manage the complexities and disruptions that characterize today’s dyn…

Annual General Meeting 2024 & Networking Event

Dear Members and Candidates,

CFA Society Hungary cordially invites its Members to our upcoming Annual General Meeting 2024 and Candidates to our Networking Event.

Details:
Date: 10 October 2024, Thursday 6:00 p.m.
Venue: Moments Hotel & Resort Budapest, Andrássy street 8, 1061

Agenda:
6:00 p.m. - Annual General Meeting (Members only) Board report on 2023 Financial Statement
Election
6:30 p.m. - Repeated General meeting (In case of lack of quorum; the repeated AGM shall have quorum.)
7:30 p.m. - Dinner & Networking (Members & Candidates)

Nomination:

We kindly encourage our Members to take part in the nomination process. Members can nominate candidates to the following positions:
- President,
- Vice President and
- 5 Board Members and
- 3 Supervisory Board members.

To see the full list of members, please, log in the CFA Institute website. The Society’s Nomination Committee will govern the nomination process and select the final list of nominees.

Please nominate a candidate indicating the position by 8 October 2024 3 p.m. by writing an email to [email protected].

Registration: https://web.cvent.com/event/4e4174ef-5a62-4c4a-a715-0fa3cfff2bc2/summary

Photos: 2023 Annual General Meeting

There is a spirited debate about retail access to alternative investments, and illiquidity is at the heart of it. While liquidity is often seen as a safeguard for individual investors, particularly those with lower incomes, it can also lead to poor investment decisions driven by behavioral biases, argue Alfonso Ricciardelli, CFA, and Pedram Parhizkari, CAIA.

Is Illiquidity a Blessing in Disguise for Some Investors? Rather than running away from illiquidity, investment professionals, investors, and regulators alike should recognize its potential benefits and consider a more balanced approach.

Wilbur Ross has excelled in a wide variety of leadership roles. His memoir Risks and Returns emphasizes both the qualities that contributed to his success and the lessons he has drawn from his experiences. This highly readable book is full of entertaining anecdotes and nuggets of wisdom on the topics of bankruptcy process, trade policy, and cryptocurrency. It therefore has educational value for CFA charterholders, writes book review editor Fridson, CFA.

Book Review: Risks and Returns This highly readable book contains numerous entertaining anecdotes about, and descriptions of, the lifestyles of the rich and famous. Readers’ interest will never flag as they glean the chunks of w…

Annual General Meeting 2024 & Networking Event

CFA Society Hungary cordially invites its Members to our upcoming Annual General Meeting 2024 and Candidates to our Networking Event.

Date: 10 October 2024, Thursday from 6:00 – 10:00 PM
Venue: Moments Hotel & Resort, Budapest, Andrássy str. 8, 1061

Agenda:

6:00 p.m. - Annual General Meeting (Members only)
Board report on 2023 Financial Statement Election

6:30 p.m. - Repeated General meeting (In case of lack of quorum; the repeated AGM shall have quorum.)

7:30 p.m. - Dinner & Networking (Members & Candidates)

Nomination:

We kindly encourage our Members to take part in the nomination process. Members can nominate candidates to the following positions:
President,
Vice President and
5 Board Members and
3 Supervisory Board members.

To see the full list of members, please, log in the CFA Institute website. The Society’s Nomination Committee will govern the nomination process and select the final list of nominees.

Please nominate a candidate indicating the position by 8 October 2024 3 p.m. by writing an email to [email protected].

Registration here: https://web.cvent.com/event/4e4174ef-5a62-4c4a-a715-0fa3cfff2bc2/summary

Photos: 2023. Annual General Meeting

Big data-driven AI in financial services is a technology that augments human capabilities. We are living in countries governed by the rule of law, and only humans can adopt safeguards, make decisions, and take responsibility for the results. Yoshimasa Satoh, CFA, argues for a multidisciplinary dialogue between regulators and the financial industry at the national and international levels to home in on legal and ethical standards.

Navigating the Risks of AI in Finance: Data Governance and Management Are Critical Big data-driven AI in financial services is a technology that augments human capabilities. We are living in countries governed by the rule of law, and only humans can adopt safeguards, make decisio…

Rapid yen appreciation in the third quarter triggered a brief-but-disruptive volatility surge across major asset markets, demonstrating the fleeting nature of "liquidity-on-loan." A mirage of plentiful liquidity that comingles sticky money supply with transitory flows likely overstated the financial system’s resiliency and market depth, suggests Victor Xing in .

Global Fungible Money Flows Heighten Volatility Risks Rapid yen appreciation in the third quarter triggered a brief-but-disruptive volatility surge across major asset markets, demonstrating the fleeting nature of “liquidity-on-loan.”

Investment managers are facing tougher questions from an increasingly sophisticated allocator market. Clare Flynn Levy shares the highlights of her recent conversation with experts Evan Frazier, CFA, CAIA, and Joe Wiggins, CFA in

Investment Manager Selection Is Hotting Up. Are You Ready for the Tough Questions? Investment managers are being caught off guard by tougher questions from an increasingly sophisticated allocator market. Are you prepared for your next beauty parade?

Confidence is a necessary but insufficient factor in long-term investing success. Felix Narhi, CFA, tells us that experts are more likely to exhibit greater confidence in their wrong answers compared to non-experts. Raising the metaknowledge quotient of the investment team can help protect against the surprises that lurk in left-tail events and remain unknown, until they’re known.

What Do Experts Really Know? Embracing the Unknown Confidence is a necessary but insufficient factor in long-term investing success. Raising the metaknowledge quotient of the investment team can help protect against the surprises that lurk in left-…

With Federal Reserve Chair Jerome Powell's semiannual address to the Senate Banking Committee this week fresh in mind, it is an ideal time to consider the drivers of r*. In an era defined by all-powerful central banks, r* may indeed be an artificial creation, argues Ladislao Vidal, CFA, in .

In Search of the Elusive Neutral Interest Rate With Federal Reserve Chair Jerome Powell’s semiannual address to the Senate Banking Committee this week fresh in mind, it is an ideal time to consider the drivers of r*.

Unprecedented mega-cap concentration since 2015 has led to limited market diversification. Learn how a multifactor methodology could re-balance US equities as advised by Ryan Giannotto, CFA.

Can Equal Weight Solve Our Concentration Crisis? Not So Fast… Mega-cap concentration has exploded since 2015. The corollary to an increasingly top-heavy benchmark is that market diversification and breadth have never been more limited. A multifactor methodolo…

As financial systems evolve, preserving the US dollar's dominance will require skillful policy management and the integration of cutting-edge technologies. A US CBDC would streamline transactions, enhance tax collection, and boost fiscal transparency, fostering sustainable economic growth. It could also counter the threats posed by decentralized cryptocurrencies, writes Adam Sandback, CFA, FRM, CPA, CMA in

Preserving the Dollar: The Role of CBDCs in Securing Economic Stability for Future Generations As financial systems evolve, preserving the US dollar’s dominance will require skillful policy management and the integration of cutting-edge technologies.

New technologies always face resistance, but demographic shifts imply there is a fierce tailwind behind crypto adoption, politically, economically, and financially. Three powerful market forces — digitization, monetary shifts, and changing demographics — make crypto adoption inevitable, writes Rob Price, CFA in .
1. Digitization: The world is increasingly digital, yet banking and finance haven’t been heavily impacted. Bitcoin represents the advent of digital scarcity. Bitcoin and crypto are taking money and finance into the digital age.
2. Monetary shifts: Monetary regimes don’t last forever. The US dollar global reserve system has been around since the 1970s and is creaking under excessive debt and ultra-low interest rates, suggesting it cannot persist indefinitely. An alternative monetary system is required, and there are not many viable alternatives.
3. Demographics: Baby Boomers have dominated global economics, politics, and culture for the last 50 years. They account for approximately 70% of US disposable income and 50% of wealth.

Is Widespread Crypto Adoption Inevitable? New technologies always face resistance, but demographic shifts imply there is a fierce tailwind behind crypto adoption, politically, economically, and financially.

Investment managers are facing tougher questions from an increasingly sophisticated allocator market. Clare Flynn Levy shares the highlights of her recent conversation with experts Evan Frazier, CFA, CAIA, and Joe Wiggins, CFA in

Investment Manager Selection Is Hotting Up. Are You Ready for the Tough Questions? Investment managers are being caught off guard by tougher questions from an increasingly sophisticated allocator market. Are you prepared for your next beauty parade?

Proxy data and estimates are likely to play an important role in plugging disclosure gaps in financial institutions' Scope 3 emissions, Mobi Shemfe, PhD, and Jaakko Kooroshy predict. What is but a proverbial footnote in the emissions profiles of most companies is a critical component of financial institutions’ overall emissions disclosures, they note.

Conundrum Cubed: Scope 3 for Financials Proxy data and estimates are likely to play an important role in plugging disclosure gaps in financial institutions’ Scope 3 emissions.

In , Yoshimasa Satoh, CFA, emphasizes the relevance of the principle 'garbage in, garbage out' regardless of the sophistication of the firm’s AI tools. He proposes that understanding the best practices for data governance and management are useful in leveraging data for improved business decisions.

Are Your Data Governance and Management Practices Keeping Pace with the AI Boom? No matter how sophisticated and expensive a firm’s AI tools are, it should not forget that the principle “garbage in, garbage out” (GIGO) applies to the entire investment management process.…

Vanguard's OCIO clients should be wary of the higher-fee active funds and that are now open to them, urges Mark Higgins, CFA, CFP. Trustees are often presented with “new opportunities” which are framed in a way that overstates the benefits, understates the risks, discounts the skills required to succeed, and all but ignores incrementally higher costs, he cautions.

Vanguard’s Former OCIO Clients Must Stand Their Ground Vanguard’s OCIO clients should be wary of the higher-fee active funds and alternative investments that are now open to them.

Commodities have historically benefited longer-term investors who are concerned with inflation, advise David Blanchett, PhD, CFA, CFP, and Jeremy Stempien. Their analysis suggests that investment professionals may need to take a more nuanced view of certain investments, especially real assets like commodities, when building portfolios.

Commodities for the Long Run? Asset classes such as commodities have historically had notable diversification benefits for longer-term investors who are concerned with inflation.

With Federal Reserve Chair Jerome Powell's semiannual address to the Senate Banking Committee this week fresh in mind, it is an ideal time to consider the drivers of r*. In an era defined by all-powerful central banks, r* may indeed be an artificial creation, argues Ladislao Vidal, CFA, in

In Search of the Elusive Neutral Interest Rate With Federal Reserve Chair Jerome Powell’s semiannual address to the Senate Banking Committee this week fresh in mind, it is an ideal time to consider the drivers of r*.

While the immediate future may not be promising for the equity premium, it looks bright for factor premiums, according to Pim van Vliet, PhD. He draws on research from Cliff Asness, Franco Modigliani, Richard Cohn, Kenneth French, among others, to remind us that the mispricing of risky stocks, driven by investors using nominal discount rates and over-optimism, reduces expected returns.

Did Inflation Kill the CAPM? While the immediate future may not be promising for the equity premium, it looks bright for factor premiums.

The efficient market hypothesis (EMH) is based on the concept of the wisdom of crowds. The behavior of crowds is a superior lens for viewing market activity. With this lens, you can replace "active management delusion" with stock market opportunity, argues C. Thomas Howard. A recent blog post written by Mark J. Higgins, CFA, CFP, prompted Howard to share his contrasting viewpoint.

Behavior of Crowds not Wisdom of Crowds When behavioral crowds are roiling the markets, as they are now, best idea active equity has an excellent chance of outperforming.

An analysis of the Fed's recent rounds of quantitative tightening (QT) and quantitative easing (QE) yields actionable insights about the relationship between monetary policy and financial conditions. Jordan Doyle examines the Fed’s response to changing financial conditions, as well as the subsequent impact of these actions.

Monetary Policy and Financial Conditions: Meaningful Relationship? An analysis of the Fed’s recent rounds of quantitative tightening (QT) and quantitative easing (QE) yields actionable insights about the relationship between monetary policy and financial con…