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Advisor Perspectives
Insights into the world of high- and ultra-high net worth investing
December 22, 2009- Vol
3, Issue 51
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Lakshman
Achuthan, the managing
director of the Economic Cycle Research
Institute (ECRI), provides an upbeat
forecast in our interview. He says the economic recovery has been underway since the
summer and he expects to see jobs growth
in the coming quarters. ECRI is a global research firm
serving buy- and sell-side institutions and Fortune 500 companies.
If you aim to integrate the spirit of the
holiday season into your practice, consider a networking
strategy that emphasizes providing
support without the direct expectation of receiving referrals.
Nancy Opiela describes a new networking group that brings together people
who serve the advisory profession and how the group's goals are unfolding.
Put together a list of the things
that frustrate advisors targeting high-end clients and roadblocks to referrals from accountants are
sure to be close to the top. Successful advisors recognize the power of a
recommendation from a HNW prospect's most trusted advisor, and Dan Richards reveals the six words that facilitate
those referrals.
A study by three neuroscientists at Emory University
finds that when given expert advice, the
decision-making part of our brain shuts down. That's not a big
deal if the advice we are receiving is good. But what if it isn't? In
this guest contribution, Kim Snider explores the problems with relying too heavily on supposed experts, and how to
counsel clients who fall into this trap.
More
articles below ...
The
most commercially successful musical conductor of all time was not Leonard
Bernstein. That honor goes to the Boston Pops' Arthur Fiedler, who
gained fame - and commercial success - by being different. Justin Locke's book, The Principles of Applied
Stupidity, shows how being different often is more important for success
than being smart.
Our
worthy public servants in Congress, not to mention in the White House
itself, have worked tirelessly to solve the
vexing problem of unemployment. They have courageously
ignored their own ignorance in matters of commerce and finance and have
unleashed a veritable cornucopia of well-intended solutions on a trusting
public. In this guest contribution, Jonathan Tardi offers a modest proposal for reducing the rolls of the
unemployed and, while he's at it, eliminating the national deficit.
Last week, we published the response from John Rekenthaler,
Morningstar's VP of Research, to our recent study of Morningstar's ratings. We disagree with the
Rekenthaler's analysis and provide our rebuttal.
In a letter to the Editor, a
reader responds to our study of Morningstar's ratings.
Lastly, we highlight submissions to Advisor
Market Commentaries.
We welcome guest submissions from our
readers. For more information, here are our guidelines.
If you are experiencing problems
opening or navigating through our newsletters, we can send you a text-only
version. Please send an email to feedback@advisorperspectives.com requesting the "text-only" version.
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in error, or you do not wish to receive future newsletters, please reply to this email with the word
"unsubscribe" in the subject line.
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"GDP for the second half of 2009 will run around 3%, although the
numbers are still settling," says Lakshman Achuthan. "It also
looks like we will have headline jobs growth likely to start in the next
few months."
ECRI: Recovery and Jobs Growth are
Underway
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The Holiday Spirit and Better Networking
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"There's
no doubt changing my focus from getting to giving has added value for my clients,
but it's also enriched my life through positive relationships with other
professionals," concludes Gary Davis. "Some may see our approach
as counter-intuitive, but that's how unique value is developed: by creating
something new, as opposed to doing what has been done before."
The Holiday Spirit and Better Networking
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Six Words that Open the Door to Accountant Referrals
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There are no short cuts to establishing referral relationships with
accountants. By levering off existing clients that you have in common and employing
the six magic words, however, you can greatly increase the odds of
overcoming the first hurdle and getting in the door for initial
conversations.
Six Words that Open the Door to
Accountant Referrals
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The Danger of "Expert Advice" - Financial or
Otherwise
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From political pundits to wine critics, so-called "experts" often
give misleading and incorrect advice. Kim Snider suggests how to help
clients who rely on these experts, which is particularly relevant in the
light of research showing that parts our brains shut down when listening to
this type of advice.
The Danger of "Expert
Advice" - Financial or Otherwise
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How to Succeed Without Knowing Anything
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The Principles of Applied Stupidity, Justin Locke's second book, details 33
of his principles that can turn stupid decisions and questionable judgments
into good fortune. From Principle #5 (Everyone Wants to Look and Feel
Smart) to #22 (Stupidity is Better than Anxiety), Locke lays out his laws
for "stupid" living.
How to Succeed Without Knowing
Anything
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Stimulus II: A Modest Proposal
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"It
is an incontrovertible fact that vast areas of America's
High Plains are good for little except cattle grazing or, perhaps,
subsidized windmills," writes Jonathan Tardi. "I propose
that Nowhere, Nebraska (which I am told is located convenient to a
well-maintained state highway somewhere in the far western region of that
great state) be the locus of my full employment enterprise."
Stimulus II: A Modest Proposal
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Morningstar Ratings - Our Response
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We respond to the three points raised by John Rekenthaler, Morningstar's VP
of Research, last week and stand by our conclusion that Morningstar's
ratings failed when measured over a full market cycle.
Morningstar Ratings - Our Response
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Letter to the Editor - Morningstar Ratings
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A reader responds to our study of Morningstar's ratings.
Letter to the Editor - Morningstar
Ratings
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Highlights from Advisor Market Commentaries
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Shedding exposure is a tactical necessity. This means banks need to tend to
their own health particularly with respect to the lingering cancer of losses
from distressed real estate still in their bloodstreams. Projected real
estate loan losses still to come are massive. The bulk of Option-ARM reset
dates are in the still to come in 2010 and 2011 bucket. The reality is that
these loans were never meant to survive the reset. Unless an alternative is
created, the human pain and loss will be massive.
"2010 Prediction: The Best is
Yet to Come" by Chris Whalen of the Institutional Risk Analyst
The size premium is unique in a number of respects. First, the relationship
between return and size applies across the complete spectrum of firm sizes.
Returns become progressively higher as one moves from large to medium to
small to micro companies (see Table I at the end of the Commentary). Risk
also grows commensurately - the smallest stocks are more than twice as
volatile as the largest stocks.
"Good Things Come in Small
Packages" by Michael Nairne of Tacita Capital
Largely because of some recently-released economic reports, we have bumped
up our real GDP forecast significantly for Q4:2009 and much less so for all
of 2010. But we have not changed our fundamental view of the 2010 economic
outlook. That view is that the recovery will continue through 2010, but
will not be vigorous. Because we expect growth in the first half of 2010 to
be slower than it was in the second half of 2009, we would not be surprised
to hear the talking heads on CNBC start yapping about a "double
dip." They are likely to be wrong, as usual.
"Q4 2009 May Be as Good as It
Gets Until Q4 2010" by Paul Kasriel of Northern Trust
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