A Fairy Tale Ending?

Over two billion people around the world watched the royal wedding on Friday. My hunch is that the overwhelming majority were women (guys aren't that into fairy tales). I have to admit I caught a glimpse of the royal wedding as it ended this morning and thought they were a beautiful couple. Kate looked so poised while William looked a bit nervous but happy.The royal couple looks very much in love, which along with health is the most important thing in life. Without love and health, all the money in the world is meaningless. Whenever I look at William and Harry, I'm reminded of their mother and the summer of 1997. She died a couple months after I was diagnosed of multiple sclerosis (MS) and while her death was tragic, it helped distract me from...

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Are States' Pensions the Next Crisis?

Virginia's News & Advance reports, Are States' Pensions the Next Crisis?: Just as America is finally showing signs of digging out of the financial meltdown and the Great Recession of 2008, there are already warning bells being sounded for the next possible scare: government pension programs. Earlier this week, the Pew Center on the States issued the results of its “fiscal stress test” of the 50 state pension programs, and the results are troubling to say the least. All told, the Pew center estimates that government pension funds and health care programs are underfunded by more than $1.2 trillion today, a clear sign that something must be done now to avoid a great deal of misery down the road. Though the Pew study looked...

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The L Word?

On Wednesday I had a nice chat with Jonathan Jacob of Forethought Risk, an independent risk advisory firm that educates and advises public and private pension funds, asset managers, an insurance companies to create a greater understanding an appreciation for the nature of risk and how to use it to the firm's advantage. They also advise treasury management functions on risk, risk valuation, how to hedge risk and provide transaction oversight to ensure pricing fairness.Jonathan traded interest rate swaps for many years at Bank of Montreal and even worked a year with the Fixed Income division at Ontario Teachers' Pension Plan during the financial crisis. After speaking with him, I simply don't understand how Teachers' let a guy like this slip...

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Currency Risk: Are You Feeling Lucky?

Pierre Malo, my former supervisor at PSP Investments and now president of Pierre Malo Consulting, sent me an article he published in the Canadian Investment Review, Currency Risk: Are You Feeling Lucky?:Since the elimination of the Foreign Property Rule in 2005, most Canadian pension plans have become more exposed to foreign investments and therefore to currency risk. While a lot of attention has been paid to strategic asset allocation (and rightly so), fiduciaries often don’t know their exact FX exposure. Furthermore, they rely on luck when it comes to currency risk. This article will consider the reasons why a clear FX hedging policy is so important and what plan sponsors should consider when implementing one. How exposed are...

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Is 40 The New 20?

On Tuesday, April 26th, I turn 40 years old. Every man I've talked to tells me "turning 40 is easy, wait till 50 hits you -- that's a tough one!". There are some excellent blog posts on turning 40, like this one, but I decided to write something different and hopefully this post will give young and old food for thought as I jot down my thoughts on life, health, relationships, work and investing.Before I get to "turning 40," I want to go back to my last blog post on the big secret to clarify a few things. First, I never heard of Joel Greenblatt nor of his hedge fund, Gotham Capital (it vaguely rings a bell). Second, even though I agree with him that most small investors are better off investing in Value Index ETFs in their stock...

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The Big Secret?

Morgan Korn at Yahoo's Breakout reports, Superstar Managers Don’t Mean Superstar Returns: Renowned Investor:Renowned investor Joel Greenblatt can't keep a secret. The founder of Gotham Capital, the hedge fund he started in 1985 that produced 40 percent annualized returns under his 20-year tutelage, wants you to be rich. Very rich. And it doesn't mean pouring your hard-earned money into five-star rated funds or hiring talking head money managers (they are plenty of them on cable business channels). In Mr. Greenblatt's latest book, The Big Secret for the Small Investor, he decodes the secrets of Wall Street for the average investor and debunks the most common myths of investing. What's the biggest secret revealed? "Investing comes down to...

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Caisse's 2010 Annual Report

Bernard Morency, Executive Vice-President, Depositors and Strategic Initiatives at the Caisse de dépôt et placement du Québec let me know that the Caisse just published their 2010 Annual Report, Building the Future on Solid Foundations (click here to download English PDF).I've already covered the Caisse's 2010 results back in February but the annual report was not available at the time. The French version was available last week and on Thursday, the Caisse posted the English version.Let me begin by going over some priorities mentioned by Robert Tessier, Chairman of the Board (pages 8-9):During the past year, the quality of the relationship between the Caisse and its depositors remained one of the Board’s top priorities. From this perspective,...

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