We’ve had a couple of days now to recover from a week of conference coverage, and we’ve found ourselves reflecting upon the value provided by each conference, along with common threads between the arguably diverse audiences.
CFA provided some excellent macro insight, particularly regarding how to apply that information to portfolio construction for investors. The high level conversation not only served as a source of education, but as a means of idea creation. The group was distinctively focused on thought leadership. NAPFA, while also largely attracting RIAs, simply nailed it on one of our favorite topics- how to best serve the client. The group exhibited a strong dedication to client service in addition to developing solutions that would better enhance the investing experience, with the backbone behind it all an unwavering belief in acting with integrity. SALT was definitely a different crowd, replete with hedge fund managers and institutional investors, with much of the conversation centered on how the macro climate was going to impact the markets, specifically, over the course of the next several years, and an in-depth look at strategy development and execution.
Without a doubt, the conferences were hotbeds of valuable information and perspectives, but perhaps more valuable still was the ability to see commonalities among the three unique events. Three things really stuck out. For starters, everyone is worried about Europe, and nobody has a clue what’s coming next. It may have been easy to look past the Euro Crisis over the last couple of months, with seeming indifference radiating out of the markets for quite some time, but in the background, no one thinks that everything is ok, and no one can say with any confidence that it will be. The general tone would seem more indicative of a “wait and see” mentality; people are just holding out hope that they can eke out whatever profits they can before that other shoe drops. This nervous tension, to us, further amplifies concerns about that fast approaching fiscal cliff and the political shenanigans it promises to deliver. If the markets are simply waiting for a definitive reason to run wild, that, in our minds, could very well be it.
The second common thread comes back to risk management. Risk is what everything came down to throughout the entirety of each of the conferences, so much so that when Troy Gayeski of SkyBridge quipped that investors also cared about returns on one of the panels, the idea nearly seemed foreign to the overarching conversation. In some ways, this is good news. It means that people are trying to stay away from the poison mentality of chasing returns. However, our hope is that we don’t completely swing from one extreme to another; the best results, in our opinion, occur when you hold return relative to risk, and tailor your investment approach to your individual risk tolerance. We’re also hoping that people start getting more of the facts on managed futures as an asset class instead of turning to the mutual fund world as a benchmark, or resting their concerns on false assumptions related to the wide array of available strategies. It’s enough to give us heart palpitations listening to some of the uninformed perspectives out there.
Finally, while there are obviously stark differences in opinion on a wide host of issues across the entirety of finance, what was most impressive was the collaborate atmosphere we saw at each event. While technically, most of these folks are in competition over market share in one capacity or another, conversations had to do with learning, growing, and bettering the industry as a whole. Regulatory banter was not couched in laments about costs imposed, but instead, their impact on the markets and the investor. Political back and forth wasn’t about party lines, but what we’d see happen to the way various investments operate. Protection of assets overshadowed assets under management, and while marketing spin was certainly out in full force, candor won the day. It’s easy to cast the financial world into the role of the villain these days, but the undercurrent of fully acknowledged responsibility at these events make the dichotomy ring a little bit hollow.
All in all, fantastic job to NAPFA, CFA and SkyBridge for putting on stellar events- and kudos to the community for making them a great experience.