Kenneth Brandborg is participating in the CFA Institute annual conference. Kenneth will share his daily insights from the conference in Hong Kong
By Kenneth Brandborg | The 12th of May 2018
Before Conference Kickoff
Again, I find myself in a hotel room preparing for the CFA Annual conference. This year’s conference is being held in Hong Kong. It is the first time I have ever been to Asia. I have been here for a couple of days now, and there are three things that are worth mentioning.
- Hong Kong has been part of China since 1997, but communism has never been farther away. I have never seen so many Tiffany’s, YSL and even Rolls Royce shops in my life.
- There live more than seven million people in the Hong Kong area. Hong Kong holds the area with the highest population density. But even so, there is a lot of stunning nature and a lot of hikes, where you after a few minutes cannot hear or see the city (Yes, I did get lost, but it was really beautiful).
- Being two meters tall, I find myself taking part of a remaking of Gulliver’s Travels. Apparently, this is so funny, that multiple (small) people have told me that I am really tall. I sense that I am the perfect conversation ice breaker.
Will Selma Gomez appear next year?
This year I am really looking forward to hearing Steven Eisman. Back in 2007, at the CFA annual conference in New York, half the speakers said there was no bubble, half said there was. Meanwhile, Steven Eisman found out the truth. This has been turned into the movie ‘The Big Short’, where Steven Carell portrays Steven Eisman. Also, Richard H. Thaler had a minor – but important – role in that movie, where he explains CDO2.
Last year in Philadelphia, Richard H. Thaler gave an inspiring speech on behavioral finance or actually on football draft – but it’s really the same thing. So, this leads to the question: Will Selma Gomez speak at the 72nd CFA annual conference in London next year?
Physics or Magic
One Speaker I’m really looking forward to is Daniel Kahneman. I don’t know if he can be called the father of behavioral finance, but he has certainly contributed significantly to the field. He has shown in very simple experiments, that we (as in people in general) are not only maximizing expected returns, and that we are not indifferent between to outcomes with the same expected return. Having studied mathematical finance, this is somewhat disturbing. My financial training is based in models and math partially build for physics. Models for heat distribution in hobs can apparently also be used to describe the evolution in asset prices. Put Itô’s lemma on top, and there you go. Mathematical finance. I will certainly get back to Kahneman on Wednesday when he has given his speech. One curious remark though. I attended a TED talk which a Danish Magician (or mentalist), Mikkel Gundersen. He told that Daniel Kahneman serves as curriculum. So, is finance shifting platform from physics to magic? That would post some communication challenges.
The Evolution of FinTech
At CMP, we are looking into the part of FinTech, that is relevant if you are in capital markets. Last year, CFA took up the challenge and put FinTech on the schedule. In Philadelphia it was the basic stuff like blockchain, Uber etc. I hope this year will offer a more mature take on the subject. Our take on FinTech is that we need to find the rare jewels among the many FinTechs and help them being integrated into the existing infrastructure and the established players.
All in all, I am very exited to see what this year’s conference has to offer, and to meet and discuss with fellow professionals.
Kenneth Brandborg, CFA
Kenneth, CFA charterholder, has worked in the financial sector since 2001 with focus on implementation and development of risk management, performance calculation and investment management systems within insurance, pension, banks, Capital Markets, as well as asset management.