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Posts from the ‘Institutional Investor’ Category

Our Man at Milken – Final Thoughts

The Milken Institute Global Conference is over for 2013; Wednesday was the conference’s last day…and what an experience. For my last post on the conference, I’ll look back on something other than macroeconomic forces and investment trends. I’m taking a slightly different tack than previous posts because there was plenty of thought-provoking content on a wide range of other topics throughout the conference…and I’d be remiss not to give those topics some coverage.

Before I attended the conference, I didn’t fully appreciate the Milken Institute’s broad mission. That mission is to “improve lives around the world by advancing innovative economic and political solutions that create jobs, widen access to capital, and enhance health.” Read more

Complex Systems, Collapse, and Virtual Connections at the Milken Global Conference

There’s been a lot of talk (and blogging) this week about the Milken Global Conference that’s going on in Los Angeles. I wasn’t able to attend in person this year, but, after looking at their website, I’m amazed at how much of the conference can be experienced virtually. The majority of the sessions are posted to their website within a few hours of their completion. After looking around, I was struck by the connections you can make at the Milken Global Conference. I’m not talking about the networking type of contacts – networking from 1,700 miles away is difficult, at best. No, I’m talking about how the conference’s melding of business, political, and academic leaders can serve to demonstrate the similarities in our experiences, whether they’re separated by thousands of miles or millennia.

As an example, I watched a panel discussion called “The Rise and Decline of Nations and Civilizations,” whose participants included Pulitzer Prize-winning author and UCLA professor Jared Diamond, and best-selling author and Harvard professor Niall Ferguson. Read more

Our Man at Milken (Day 2) – More Thoughts from “Where the World Connects”

Tuesday was another full day at the Milken Institute Global Conference. In my last post, I gave you a session-by-session recap of Monday’s events. Today, I thought I’d examine the past two days of presenters and panels with the intent of addressing the recurring questions called out in my previous post. First, how should we think about risks in the current environment? And second, when and where should we look for real growth? That second question of course implies a corollary, where will we find investment returns? Read more

Our Man at Milken (Day 1) – On-the-Ground Insights from “Where the World Connects”

This week, in my capacity as a part of the strategy team for Principal Global Investors, I have the opportunity of attending the Milken Institute Global Conference in Los Angeles. The conference is a program that includes 140 sessions involving a total of 620 speakers and panelists. This year’s record attendance of over 3,000 brings together participants from 40 countries. By any measure, it’s an incredible range of experiences and disciplines. For the next couple days, I’ll be sharing a few insights from some of the presenters and panels, starting with this post about some of Monday’s sessions.

First, a general observation. Experiencing this conference brings home the fact that, at its core, investing is about people and ideas. In a forum like Milken, you really see the power of bringing senior business leaders and investment professionals together with clients and guests for three days packed with thought-provoking discussions. Read more

Europe Changes Its Tune on Growth vs. Austerity

Oh dear. Reinhart and Rogoff may wish to avoid ever holidaying in Greece, Portugal, or Spain. Their seminal (and now-disproved) paper – arguing that once a country’s public debt was over 90% of their GDP, there is a strong negative relationship with the country’s economic growth – probably took up a fair amount of the Troika’s discussion time when it was deciding on the measures the peripheral countries needed to take if aid were to come their way.

Of course, Reinhart and Rogoff were not the only ones to argue that high government debt is bad for growth. Over the years, several economists have pointed out that government borrowing can crowd out private investment, and that reducing government borrowing can allow growth to resume.  Read more

Coding Errors and Challenging Assumptions: Why the Debate over Reinhart-Rogoff Matters

Last week, the economics blogosphere was ablaze with commentary on an economics paper from 2010 called “Growth in the Time Debt.” The paper was by Carmen Reinhart and Kenneth Rogoff, both of Harvard, and has come to be known as just “Reinhart-Rogoff.” What’s so big about a three-year-old economics paper? Well, most of the current calls for austerity in the U.S. and around the world cite this paper as the major influence in cutting government spending…oh, and the conclusions of the paper turn out to be wrong. Read more

Investing is all About Riding the Bigger Bike

From the desk of risk:

The trader sums his gains.  The investor compounds her returns.

When I was a kid, we used to have bike races through the neighborhood.  One particular race on a summer evening featured a 1.5 mile route, a fit 12-year-old on a dirt bike, and a slightly pudgy 10-year-old on a ten-speed.  Of course, the ten-speed was a much bigger bike so it was going to be an interesting race. Those not racing would follow along on their bikes or wait at various points along the route.  A few bets were made (mostly trading cards) and the race was on.

The race began exactly as would be expected – the older boy on the smaller dirt bike jumped out to an enormous lead. At one point, the distance between the two riders was somewhere between two to three hundred yards.  But . . . slightly past the halfway point, the younger boy on the ten-speed pulled ahead. In the end, it wasn’t even close. 

Why did the younger boy win?  Read more