CFA Society Chicago NewsBrief
Mar. 24, 2015

Investment strategy by CEOs at big companies reveals an ominous trend
Crain's Chicago Business
Chicago's biggest companies are investing less in their businesses, a safe short-term play that puts the future at risk. From ADM and Caterpillar to Walgreens and McDonald's, investment budgets have declined by billions of dollars in recent years. Data from FactSet Research Systems show capital expenditures sank 3.1 percent to $27.1 billion last year at the 25 largest companies on Crain's list of publicly traded firms.More

Viewing stocks as bonds
CFA Chicago
The basic premise of the free enterprise system is to have an efficient allocation of capital to benefit society. Yacktman will present a systematic, objective approach to analyzing investments that generate cash and how this process interacts with our dual objectives of both protecting and growing capital over a long period of time.More

Insurance industry primer
CFA Chicago
Balance sheet based companies, such as insurance companies, play by different rules and methodologies based on the unique nature of their business. Focus is placed on our insurance industry primer which dives deep into an insurance company's unique financial statement terminology and drivers. More

Emerging opportunities in Latin America
CFA Chicago
Latin America represents an increasingly important economic region in the world. By 2020, the IMF predicts that Brazil and Mexico will rank among the top 10 GDP countries globally. The abundance of natural resources, growing and more educated populations with rising incomes, and capital market reforms in several countries, create potentially fertile areas for long-term investing opportunities.More

The myth of volatility drag: Part 1
CFA Institute's Enterprising Investor
Scary stuff! But reading these articles, I found myself wondering, is it actually true? Like so many myths, there is a kernel of truth. But the interpretation that volatility is an active force, “pulling” down returns and costing you money, is simply not correct. In part 1, we will explore the crux of the issue, understanding the geometric mean. In part 2, we will apply this understanding to arguments for volatility drag.More

Pot's legal: How to finance it?
Crain's Chicago Business
The pot plants in Illinois' newly licensed cultivation facilities aren't the only green the state's medical marijuana industry will need to get off the ground. The 52 dispensaries and 18 cultivation centers that won licenses in January from Gov. Bruce Rauner will need money. Fortunately, Illinois doesn't seem to be running into the kinds of financing issues that have plagued many of the 23 other states that permit marijuana use, all for medicinal purposes and a few for recreational use as well.More

Loss of market makers may lead to buy-and-hold strategies
Pensions & Investments
Corporate fixed-income investing is becoming a buy-and-hold market, as the reduction of traditional market makers and the resulting loss in inventory make active trading strategies more risky. “The long term favors fundamentally biased fixed-income investors over those with very active trading strategies,” said Michael C. Buchanan, deputy chief investment officer, Western Asset Management Co., Pasadena, Californai. “It's getting the right price and owning the investment, not trading it.More

Chicago public schools facing $200 million-plus penalties as bond ratings plunge
Chicago Sun-Times
Chicago’s deep financial problems worsened Friday as a Wall Street bond-rating agency dramatically downgraded the credit of the city’s school system — triggering penalties that could come to more than $200 million. Fitch Ratings dropped the Chicago Board of Education’s credit score by three notches.More

For business, more women in charge means bigger profits
Chicago Tribune
When Rohini Anand took over diversity programs at multinational catering company Sodexo in 2002, she had one goal: To prove that it pays for a company to have equal numbers of male and female managers. Sodexo, which has 419,000 employees in 80 countries, says she's done just that.More

This fund manager has consistently beaten the S&P 500 for 40 years
Bloomberg Business
Albert Nicholas is well aware that some prominent academics say stock pickers can’t beat their benchmarks over the long haul. He doesn’t have a Ph.D., yet he has good reason to disagree, Bloomberg Markets magazine will report in its April issue.More

Corona-maker announces billion dollar investment in Mexico
Forbes
Constellation Brands, the company that distributes Corona, Modelo Negra, and Modelo Especial in the U.S. announced plans to invest more than one billion dollars to expand production at its facility in Coahuila Mexico from 10 to 25 million hectoliters a year, a move that the company expects to help it increase its share in the U.S. beer market from 7 percent to 14 percent.More