Setting Portfolio Objectives
Todays put-off objectives reduce tomorrows
- Harry F. Banks
Why setting objectives can be difficult
The importance of primary and secondary
The Mathematics of Diversification
O! This learning, what a thing it is!
- William Shakespeare
The reason for portfolio theory
A Review of Statistical Principles
Useful in Finance
Statistical thinking will one day be as
necessary for effective citizenship as the
ability to read and write.
- H.G. Wells
The concept of return
Some statistical fac
The Role of Real Assets
Though wisdom cannot be gotten for gold, still les
can it be gotten without it.
- Samuel Butler
Real estate in general
Timberland in particular
Most portfolio investments a
The scientific advances provided by modern portfolio theory, together
with the evolving prudent expert standard, virtually require that
fiduciaries base their investment actions on a total portfolio
Never tell people how to do things. Tell them what to
do and they will surprise you with their ingenuity.
- General George S. Patton
Why screening is necessary
What constitutes a good screen?
International Investment and
All the people like us are We,
And everyone else is They.
And They live over the sea,
While We live over the way.
But would you believe it?
They look upon We
As only a sort of They.
- Rudyard Kipli
Why Diversification Is a Good Idea
The most important lesson learned
is an old truth ratified.
- General Maxwell R. Thurman
Carrying your eggs in more than one basket
Role of uncorrelated securities
Lessons from Evans an
Picking the Equity Players
You buy a stock, and when it goes up, you sell
it. If it doesnt go up, dont buy it.
- Will Rogers
Stock selection philosophy
Dividends and why they really do not
Revision of the Equity Portfolio
An individual can make a difference; a team can
make a miracle
- 1980 U.S. Olympic hockey team
Active management versus passive
When do you sell stock?
Bond Prices and the
Importance of Duration
We cannot gamble with anything
so sacred as money.
- William McKinley
Review of bond principles
Bond pricing and returns
The investment characterist
Revision of the
There are no permanent changes because change
itself is permanent. It behooves the industrialist to
research and the investor to be vigilant.
- Ralph L. Woods
Passive versus activ
Removing Interest Rate Risk
The first mistake is usually the cheapest mistake.
- A trader adage
Interest rate futures contracts
Concept of immunization
A portfolio is interest rate sensitive if its
We investment professionals also need to keep in mind that
some who participate in our investment decisions will be
younger and less experienced than we are; some, perhaps
the most influential, will be older and more powerful
Whats a good way to raise the blood pressure of an
Investor Relations Manager? Answer: Talk about
the pros and cons of stock options.
- Eilene H. Kirrane
Using options to generate income
To preserve their independence, we must not let our
rules load us with perpetual debt. We must make our
election between economy and liberty, or profusion
- Thomas Jefferson
The meaning of
Benching the Equity Players
Dont be discouraged by a failure. It can be a positive
experience. Failure is, in a sense, the highway to
success, inasmuch as every discover of what is false
leads us to seek earnestly after what is true, and ever
Integrating Derivative Assets and
Life wasnt designed to be risk-free. They key is not to eliminate
risk, but to estimate it accurately and manage it wisely.
- William A. Schreyer
Setting the stage