Spring 2009InSIde:

PreSIdent’S Letter . . . . . . . . . . 2

InVeStMent tHeMe: GLOBAL deMOGrAPHICS And tHe IMPACt On InVeStMent OPPOrtUnItIeS . . . . . . . . . . . . . . . 3

2009 InAUGUrAL FInAnCIAL MArket FOreCASt dInner . . . . . . . . . . 4-5

rePOrt FrOM tHe CHAIr: rOB Bennett, CFA . . . . . . . . . . . . 6

UPCOMInG eVentS . . . . . . . . . . . 7

MeMBer rePOrt . . . . . . . . . . . . . . 8

1: The sages of the CFA Victoria Forecast Dinner: presenters (from left to right) Martin Barnes, managing editor of the Bank Credit Analyst,

Tony Gage, former Chair of the Board of Phillips, Hager and North Investment Management,

and Martin Murenbeeld, president and chief economist of Dundee Wealth Economics.

Published by CFA Victoriawww.cfavictoria.com

CFA Victoria 2009 Inaugural Financial Market Forecast dinner

2: Mark Frey, Vice President, Foreign Exchange Trading, of Custom House Ltd., explains what he expects to be the major themes dominating investment markets in 2009. 3: Attendees at the Inaugural Financial Market Forecast

Dinner enjoy the reception beforehand: from left to right, Jim Megson, Carolyn Thoms, CFA, and Stephen Barlow, CFA, both of Barlow Capital, Victoria, and Joan Wiggins, CFA, of RBC Private Counsel Inc., Victoria.

Opinions expressed in the CFA Victoria newsletter do not necessarily represent those of the authors’ firms of employment or of CFA Victoria and do not constitute a solicitation for the purchase or sale of any financial instruments . Information herein is obtained from various sources and is not guaranteed for accuracy or completeness . the authors’ firms and CFA Victoria there-fore disclaim any liability arising from the use of information in this publication .

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newsletter

Do you have a story idea or a topic that will interest and inform CFA Victoria members? Send an e-mail to let us know what you would like to see in the newsletter or if you want to write something yourself.

Potential topic areas include, but are not limited to:• Industrydevelopments• Investmentthemes• Profilesofnotablemembers

Ifyouhaveanideaforanarticle,please send it to: Gord Walker, CFAGordon.Walker@RBC.com

President’s LetterAndrew Shortreid, CFA

MUCH HAS CHAnGed In tHe wOrLd SInCe our last newsletter, but I’m happy to report that despite recent events in world markets CFA Victoria is prospering mightily and moving forward on many fronts .

we kicked off the new Year in fine fashion with our Inaugural Forecast dinner on January 15th at the delta Ocean Pointe . By all accounts this event was an unequivocal success for the society, due in no small part to the hard work of our volunteers and the broad support received from our members, partners and the local investment community . For readers not in attendance that evening, we have provided an account of the festivities and prognostications beginning on page 4 . Suffice to say, the common message from our presenters was that investors are not yet out

of the woods – a sentiment echoed on the aggregate by the attendee forecast ballots we received .

the discussion at our monthly board meet-ings continues to revolve around two core themes that we want to define the society’s activities – innovation and collaboration . As a group, we continually seek new ways to provide member value through initiatives that the society has taken and fresh endeavors in the future . we are an open, communica-tive and forward thinking leadership group with a deep desire to continually present our society and its members to the world around us in the best possible light .

to amplify these efforts we are working through a growing network of local, regional and national partners to extend the reach of our initiatives beyond both the professional borders of CFA Charterholders and the physical borders of Greater Victoria . the foundation of this partnership group is comprised of Custom House Ltd . and other CFA societies in Canada and the US Pacific northwest (Programming); the University of Victoria’s Faculty of Business and Stalla review for the CFA Program (education and Membership); and the Art Gallery of Greater Victoria (Public Awareness) . Collectively these organizations share our values of integrity and excellence, while individually each enhances our offering to diverse, yet equally crucial elements of our stakeholder base .

we have an exciting line-up for the spring slate of programming events . the full listing can be found on page 7, but two in particular demonstrate our commitment to innovation and collaboration .

the first of these events is the launch of CFA Victoria’s Private wealth roundtable with

Lisa Gray (www .graymatterstrategiesllc .com) on March 31 . Ms . Gray exclusively consults with global families to design and implement goal-based asset allocation strategies that incorporate family dynamics and governance into wealth management decisions . this event format will involve an afternoon pre-sentation and case study, open to the general investment community, followed by a more intimate reception and working dinner with attendance limited to CFA Victoria members . the goal is to provide a forum where our members can engage a globally recognized expert in two-way, case-based discussion to achieve a deeper comprehension of specialized wealth management topics .

the other don’t-miss event is on May 27th . CFA Victoria, the Art Gallery of Greater Victoria and Custom House are proud to present an evening with Steve Sitao Xu . Based in Shanghai, Mr . Xu is the economist Group’s Chief representative in China and head of its economist Intelligence Unit . He will be speaking on the Chinese banking system, foreign exchange reserve and rate management, interest rate policy and other factors . Attendees will be invited to enjoy a catered reception beginning at 5:00pm, and to experience Edo, Arts of Japan’s Last Shogun Age exhibition, following the presentation at 7:30pm . to bring Mr . Xu to Victoria, we quarterbacked a three society tour that will include stops in kelowna and Seattle .

As always, our efforts are aimed at providing society members with opportunities to enrich their professional lives and engage the wider community in ways that will enhance public awareness of what CFA Victoria and our members stand for . regarding these efforts, we thank each of you for your feedback, volunteerism and continued support .

Share your knowledge and insights with readers of the CFA Victoria Newsletter

2 NewsletterSpring 2009

Philippe Monier, CFAEconomist, Research & Risk Measurement, bcIMC

dISCUSSInG deMOGrAPHIC trendS And how they will affect investment opportuni-ties in coming years at a recent CFA Victoria Society luncheon, richard Hokenson offered several bold predictions that challenge widely held views . Founder of Hokenson & Company, a new Jersey consulting firm, Hokenson was previously chief economist at donaldson, Lufkin & Jenrette (dLJ), where he pioneered the application of demographics to economic and financial market forecasting .

Hokenson began by stating that the world population will never reach 8 billion people . He referred to a global phenomenon he called the race to zero population growth, and attributed it to a combina-tion of government policies to limit family size and changes in lifestyles . His warning was that world population is now growing too slowly and aging too quickly to support healthy economic growth .

Among large countries, the two most rapidly aging populations are in China and Japan . Both countries experienced a similar period of economic take-off, China’s coming about three decades after Japan’s, during which they rapidly became highly competitive play-ers in the world economy . Hokenson pointed out that aging populations are now putting these successes at risk .

even if China was to reverse its one child policy, Hokenson argued that little would change in its population growth given the choices already made by families and the current population structure . the aging of China is a process that has lasted for a long time, and Hokenson noted that Mao tse tung refused to acknowledge the predictable con-sequences of this process when imposing his views concerning family planning . Hokenson said that too many people think of China as a vast reservoir of low-cost workers, when the demographic reality is quite different .

Hokenson believes that China will need much higher birth rates to prepare for the retirement

of its people . In China, he claims, 1 .2 billion people are not or will not be covered by pension funds and will have to rely solely on family support in retirement .

In Japan, the aging population is leading to chronic deflation . the labour force size is declining, with labor shortages already severe in many areas . Hokenson attributed the grow-ing use of robots in Japan – which already has 40% of the world’s robots – to the lack of labor and a reluctance to open the door to immigrant workers .

How do countries prepare for “retirement”? Hokenson’s answer: Like individuals, they save, in a country’s case by building up foreign reserves . He feels that China is not prepared, however, estimating that for this purpose the country will need reserves of 5 to 10 trillion U .S . dollars (compared to current

reserves of roughly 2 trillion U .S . dollars), and pointed out that a big difference between China and Japan is that Japan managed to become rich before it got old, while the opposite is true for China . Under these circumstances, and given that the U .S . popu-lation is not aging as quickly as that of either China or Japan, Hokenson’s controversial view is that policies aimed at encouraging higher U .S . savings and increased Asian consumption will be a recipe for disaster .

In a similarly controversial vein, Hokenson predicts that fewer people than expected means global deflation is more probable than inflation as demand shrinks . Comparing long-term treasury yields to the smoothed growth of current-dollar U .S . GdP, and then the growth of the U .S . labour force to current-dollar GdP, he pointed out the similarity in the paths they follow . Since the future labor force can be predicted from today’s population structure (taking into account legal and illegal immigration), he concluded that the predicted low labour force growth will lead to low GdP growth . Hokenson admitted, though, that it is unusual to use current-dollar GdP rather than

real GdP in this sort of analysis .

Hokenson next showed the growth rate of age groups from 2005 to 2015, highlighting the decline in the age 20 to 29 cohort, espe-cially in western europe and Japan . this age group is characterized by high consumption as young people make the purchases neces-sary to set up their first homes, and a reduction in this segment of the population does not bode well for demand or the businesses that hope to meet this demand . Hokenson commented, though, that “despite this incredible predictability, it takes every market by surprise .”

the significant exception among developed countries is the United States with a rela-tively high fertility rate (about 2 .0 children per woman of child-bearing age) . Hokenson observed that the number of U .S . marriages is

rising, and the number of divorces is falling, and that married couples are more likely to buy homes . these demographic factors will support consumer spending in

the U .S ., and Hokenson believes that given the importance of household formation, the key to resolving the current crisis is to “get housing right” .

responding to questions, Hokenson said that the synchronized economic growth of the 6 years prior to the current global downturn is unlikely to be seen again in the foreseeable future . He also expressed doubt that current efforts by governments to stimulate the world economy by injecting massive amounts of funds would be sufficient, as these are dwarfed by the amount of private wealth sitting on the sidelines .

In summary, richard Hokenson’s outlook is that global population growth will be too low to maintain the demand needed to prevent severe consequences, such as deflation and chronically low GdP growth, and this will have critical implications for investors . Other experts clearly think otherwise . they see slower population growth as a positive trend, as it will limit overuse of scarce resources, reduce activities contributing to global warm-ing, and enable countries to cope better with the needs of their citizens . time will tell .

Global demographics and the Impact on Investment Opportunities

InVeStMent tHeMe

“Encouraging higher U.S. savings and increased Asian consumption will be a recipe for disaster”

3NewsletterSpring 2009

IS nOw tHe tIMe tO ABAndOn ALL HOPe or is it the buying opportunity of a lifetime? Always eager to help resolve an investing dilemma, CFA Victoria broke new ground in 2009 with its Inaugural Financial Market Fore-cast dinner in January . Guests were treated to an abundance of thought provoking and bold commentary from a slate of notable speakers sharing their thoughts on the dreadful events of 2008 and providing a glimpse at what lies ahead . Approximately 150 guests filled the Grand Ballroom of the delta Ocean Pointe resort, enjoying what promises to continue as a premier event for Victoria’s financial and investment community in coming years .

Following opening remarks, the evening’s presentations began with a special address by Martin Barnes, managing editor of the Bank Credit Analyst, who spoke with his usual dry Scottish wit . Mr . Barnes last addressed CFA Victoria at a luncheon in november, 2006, and a few weeks afterwards in an interview with Barron’s magazine he likened the investment environment at that time to the eponymous town in the movie Pleasantville, “…where everything appears normal and orderly and very calm, but under the surface it’s very oppressed and unnatural .” He felt the markets were “certainly not in a state of equilibrium here in terms of financial imbalances . But I don’t see the catalyst for change yet .” two years later, with the catalyst revealed and market orderliness a faint memory of happier days, Mr . Barnes looked at the current invest-ment environment and what he could see happening over the coming year .

Mr . Barnes began his presentation, A Historical Perspective on the Equity Market, by noting that during the past year “economists and financial analysts haven’t covered themselves with glory .” He then examined the belief of many investors that stocks were invariably the

best investments for the long run, noting that total returns relative to 10-year bonds were now back to where they were in 1965, and that from as far back as 1872 U .S . bonds had performed as well as U .S . stocks .

the golden era for stocks was the 1950s, when stocks were “dirt-cheap” coming out of world war II with price-to-earnings (P/e) ratios around 6 and lots of pent-up consumer demand . Mr . Barnes pointed out that many

people thought the current market cheap at a P/e of 15, but he personally would not consider that a bargain in the midst of a recession . nor did he consider bonds particu-larly attractive given the likely medium-term inflationary impact of the huge amounts of monetary stimulus being applied . He allowed that equities could do better, but it will not be like the 1950s since the earnings outlook is not great, and, in fact, real earnings have not grown since the 1960s .

Mr . Barnes was decidedly pessimistic in his outlook, saying that “I cannot recall any time so much economic data looked so bad .” referring to a spike in the bank loans to GdP ratio, he commented “I find it very hard to be optimistic about the economic outlook or the earnings outlook .” Furthermore, he predicted eventual nationalization of the U .S . banking system . despite positive considerations – such as the fall in P/e ratios, extraordinarily stimulative monetary conditions, equities dropping to 35% of U .S . household discre-tionary investments, and the fact that there is a mountain of cash on the sidelines earning “squat” – Mr . Barnes said his bias was to be cautious and on the sidelines .

Perhaps fearing that his audience might think his outlook ambivalent, Mr . Barnes then explained that his feelings about the current investment situation were akin to those of a soldier fighting in the trenches of the Great war who had just seen his friend take a bullet in his face . He felt a strong incentive to just keep his head down as best he could .

the next speaker, Yoram Bauman of the University of washington, the world’s only stand-up economist/comedian, provided a more light-hearted perspective on what’s going on in the markets . His tongue-in-cheek assessment of the current economic situa-tion is that the U .S . economy is like a tired hamster: Mr . Bauman thinks the economy just needs some rest, but policy-makers want to feed it crystal-methamphetamine . His economic prognosis is that in two years time, “we’re going to have one ugly hamster .”

Martin Murenbeeld, president and chief economist of dundee wealth economics, was the first forecast panelist to speak, and his theme was The Great Depression of 2009 . He began by stating that ‘greedy bankers’ are not the problem – there have always been greedy bankers, especially when there is a lot of money around . the real problem, as he sees it, is that the world has suffered from serious imbalances, such as the U .S . current account deficit, for many years, and some countries, notably China, manipulate their currencies according to a mercantilist model of eco-nomic growth .

CFA Victoria 2009 Inaugural Financial Market Forecast dinner

Forecast Dinner panelist Tony Gage listens at-tentively to the analysis and outlook provided by

fellow panelist Martin Murenbeeld.

“I cannot recall any time so much economic data looked so bad”

CFA Victoria 2009 Inaugural Financial Market Forecast Dinner — Audience Predictions

Crude Oil (US$ Per

Barrel)

Gold(US$ Per

Ounce)

CAd/USdexchange

rate

10-Year Gov’t

Bond Yield

S&P/tSXComposite

Index

Mean Of All respondents 63 .19 947 .58 1 .15 2 .97% 9,493

Mean Of Lowest 20% 33 .30 682 .96 0 .99 1 .99% 7,926

Mean Of Highest 20% 106 .20 1290 .81 1 .31 4 .15% 11,138

4 NewsletterSpring 2009

the foreign exchange reserves of the larg-est holders (e .g ., China, Japan, russia) now exceed five trillion U .S . dollars, and Mr . Murenbeeld pointed out that this money has been recycled through lending in the U .S . and other developed countries . He thinks this could lead to a crisis much like the Latin America crisis of the 1980s caused by a similar recycling of petro-dollars in the 1970s . He noted that easy credit had led to rising house prices around the world in countries like Canada, Spain, France and the U .k ., not only in the United States .

describing the stages of a depressionary spiral, Mr . Murenbeeld noted that we are well into the process . His solutions to stop the downward spiral are to massively boost demand to soak up excess supply (i .e ., the keynesian prescription), monetary easing to arrest bank failures and counter credit contraction, and currency devaluation, particularly against Asian currencies .

reflationary policies are generally very good for gold; conversely, deflation due to reces-sion could hold gold back . On balance, Mr . Murenbeeld expected reflation to win out .

next up was Mark Frey, Vice President, Foreign exchange trading, of Custom House, who discussed the current themes dominat-ing the foreign exchange markets . He began by saying that prices were no longer driven by fundamentals, but by a market transfixed by risk aversion . Although hard-asset defla-tion still supported the U .S . dollar, Mr . Frey expected the dollar to lose its shine once fundamentals were again of more conse-quence . However, he warned that traders were pricing in a second round of risk aversion, and investors were flooding into U .S . treasury bonds as a safe haven .

Mr . Frey said that for the U .S . housing slump to bottom out, there would have to be a recovery in employment, but this was unlikely if extreme risk aversion continued to prevail . On the positive side, the trade balance was moving in the right direction, largely because of lower oil prices .

turning to the euro area, Mr . Frey commented that it had also been infected by the global epidemic, and the european Central Bank had been slow to recognize the softening of the economic picture . However, the eCB had just cut its base rate by 50 basis points and he thought there was more to come . He

expected the euro to drop by another 3 to 4 cents against the U .S . dollar . Interestingly, he said that nobody was talking any longer about foreign reserve diversification away from the U .S . dollar .

For the Canadian dollar, Mr . Frey said the negative factors were the ongoing correction in commodity prices and some pressure due to political risk, presumably referring to the uncertainties of minority government . On the positive side was the fact that Canada’s current account was in the black and the fiscal environment was favorable . In contrast to six months earlier, he said, employment and domestic demand were sagging . Overall,

he considered the investment environment bearish and expected Bank of Canada cuts of another 100 basis points .

Making his predictions, Mr . Frey confessed that “never has it been more difficult to put my name on a forecast .”

the final panelist was tony Gage, director of PSP Investments and Sky Investment Counsel, and former Chair of the Board of Phillips, Hager and north Investment Management .

A Perspective on China’s Banking System and Exchange Rate Policy

APresentAtIonby: Steven Sitao XuDirector, Advisory Services China, Economist Intelligence Unit

May 27, 2009

CFA Victoria invites you to a special presentation and evening at the Art Gal-lery of Greater Victoria. our featuredspeaker, Steven Sitao Xu, will address anissueofgreateconomicandfinancialimpact: the path that China will follow with regard to its banking system and exchange rate policy. Guests will have an opportunity to socialize at a reception before the presentation and afterwards enjoy a curator’s tour of the Gallery’s current exhibit, Edo, Arts of Japan’s Last Shogun Age.

stevenleadstheeconomistIntelligenceUnit’s advisory services in China and acts as The Economist Group’s chief rep-resentative in the country. He chairs the economistIntelligenceUnit’sCorporateNetwork meetings in Beijing and often speaks at major conferences and forums both within China and abroad.

In addition,steven is frequently calledupon to advise multinational compa-nies seeking to understand and navigate China’s macroeconomic and industry shifts. Before joining The Economist Group, he was head of economics at

the Industrial and Commercial bankof China (Asia), where he was respon-sible for macroeconomic and market research, while also helping to develop treasury and renminbi products, for the overseas flagship company of China’s largest bank.

Steven currently writes a column for the economist Intelligence Unit’s Business China and Caijing, a leading Chinese business publication. He can often be seen on BBC, CNBC, CNN and Bloomberg TV as a commentator on Asian economic affairs.

Reception: 5:00pm Presentation: 6:00pm

Curator Tour of Edo, Arts of Japan’s Last Shogun Age: 7:30pm

The Mansion, art Gallery of Greater Victoria

1040 Moss Street, Victoria

Members: $30 | Non-Members: $40

toreserveorrequestmoreinformation,please e-mail info@cfavictoria.com with “Art Gallery of Victoria Presentation” in the subject line.

Continued on page 8.

5NewsletterSpring 2009

rePOrt FrOM tHe CHAIr

rob Bennett, CFAeducation Chair

Investment research Challenge

Five University of Victoria students recently participated as a team in the CFA Institute’s Investment research Challenge, placing third in the western Canada area competition . this competition included teams from five other western Canada universities: the University of regina, University of Alberta, University of Calgary, University of British Columbia, and Simon Fraser University .

the six western Canada teams were each sponsored by their local CFA society, with CFA Victoria sponsoring the University of Victoria team .

the objective of the competition was to pro-duce the best investment research report and presentation on a publicly traded company . All team members had to be students and none could be a CFA Charterholder .

the University of Victoria team consisted of todd McSween, Atish Gadyar, Peter Hunnisett, Bart Johnson and reia Ly . the team was supported by Professor Angela downey, as faculty advisor, and tony Gage, as the industry mentor . [See this issue’s recap of the Forecast Dinner for more on Mr. Gage.]

each western Canada team prepared a research report on empire Company which had to be submitted by the end of January, 2009 . the teams then traveled to Calgary to make their presentations on February 28 .

Similar competitions took place worldwide with overall sponsorship and funding pro-vided by the CFA Institute . the global com-petition has three levels: local (e .g ., western Canada), regional and global . the winning team from each competition at the first two levels goes on to compete at the next level .

the University of Alberta team, winner of the western Canada competition, will go on to

new York to compete in the Americas com-petition at the end of March . From there, the winning team will go to London, england, for the global competition . At each level, teams will use their report and presentation from the local area competition .

On behalf of CFA Victoria, I congratulate the University of Victoria team on their perfor-mance, and thank Professor downey and tony Gage for their generous support and guid-ance . As well, I would like to thank CFA Victoria members Jill Sing and Jeff Constantinescu for their support of the research Challenge by volunteering to be members of the team that graded all six of the reports from the western Canada teams .

scholarship Program

CFA Victoria gave scholarships for the June 2009 CFA exam to eight candidates from the Victoria area . the scholarship covers the enrolment fee, if applicable, and all but US$220 of the recipient’s exam registration fee, making the scholarship worth at least US$380, or up to US$1,175 .

CFA exam candidates were asked to submit their scholarship applications in december . each applicant had to explain why the Charter was of value, present their case for financial need, and explain how the CFA standard of conduct applies to their workplace . Applicants were evaluated based on their responses .

Candidate reception

CFA Victoria hosted a candidate reception on January 15, 2009, prior to the Forecast din-ner . the reception was co-hosted by Stalla, a company that provides exam review material to CFA exam candidates . twenty-eight CFA candidates and potential candidates attend-ed the reception and Stalla provided prizes that included scholarships and invitations to the Forecast dinner .

Practice exam

A practice CFA exam is scheduled for May 2, 2009, likely to be held at the University of Victoria . the practice exam is prepared for the Boston Society of Security Analysts, and it uses the same format as the exam given by the CFA Institute at the beginning of June .

CFA candidates wishing to test their exam preparedness in a setting that replicates what they will experience in the June exam are encouraged to register . registration costs $60, and registration forms and further information are available online at the CFA Victoria website (http://www .cfavictoria .com/default .aspx) .

study Groups

two study groups, one each for level I and II candidates, are being formed . Candidates interested in participating in a study group should send their name to rebennett@shaw .ca (attn . education Chair, rob Bennett), and we will share the names and email contact information of those who wish to participate in a study group with other similarly inter-ested candidates .

University Outreach

CFA Victoria gave presentations to University of Victoria business students in October, 2008, and to University of Victoria business and eco-nomics students in mid-March, 2009 . Much of the presentation material was prepared by the CFA Institute, and the presentations were mainly about the CFA Program, the role and objectives of the CFA Institute, and the value of a CFA Charter .

CFA Victoria Board member Jeff Hunter joined me in giving the October presentation, which was attended by about 20 students . For the March presentation, Jeff and I were joined by Board member Philippe Monier, and this pre-sentation was also attended by 20 students .

In the future, we plan to make additional presentations of this nature at the University of Victoria and other educational institutions in the Victoria region .

CFA VICtOrIA enGAGeS In SeVerAL ACtIVItIeS aimed at helping those preparing for a career as an investment professional to recognize the value of the CFA Charter . Here, I would like to explain what we are currently doing in this area .

6 NewsletterSpring 2009

Optimizing relationships with Clients of wealth

lIsA GrAY, FOUNDer Graymatter Strategies LLC Richmond, Virginia

CFA Victoria launches its Private Wealth Series with a special workshop, reception and dinner featuring Lisa Gray of Graymat-ter Strategies LLC.

Ms . Gray consults extensively with global families and their advisors on the direct influ-ence of generational perspectives, family dy-namics, and governance on wealth manage-ment decisions .

Ms . Gray will discuss the true definition of family wealth, and how and why client needs have changed . She will share with us what she believes clients of wealth wish from their advisors, how best to meet their expectations and what actions to take during unsettling times .

After the workshop, a reception and dinner will be held for those wishing to participate in a candid discussion on optimizing relation-ships with clients of wealth, focusing on how advisors can best serve clients of different generations . this special dinner, hosted by CFA Victoria in the Union Club’s Palm Court dining room, will include a case study and discussion facilitated by Ms . Gray .

Ms . Gray has 21 years experience in wealth management and is the founder of Gray-matter Strategies LLC . of richmond, Virginia . Based on her experience working with cli-ents of wealth, she developed the diagnostic wealth Optimization Consulting™ model of service presented in her book, The New Fam-ily Office: Innovative Strategies for Consulting to the Affluent (euromoney Books, 2004) .

A sought-after speaker and educator, Ms . Gray is a regular contributor to the Journal of Wealth Management and Trusts & Estates mag-azine . Her new book, Generational Wealth Management: A Guide for Fostering Global Family Wealth, will soon be published by euromoney Books .

March 31, 2009 Afternoon Session: 3:00pm-5:00pm Evening Session: 6:00pm-8:30pm Begbie Room, The Union Club of BC

surviving economic lassitude

Dr. rICHArD GlICkMAN

dr . Glickman is co-founder and past CeO of two public healthcare/biotech companies . In his presentation, he will talk about insights gained during his 25 years in this sector, and about his experiences, strategies, and challenges during the founding, growing, financing and selling of two Victoria-based public companies . From what he has learned over the years, dr . Glickman will provide his perspective on how the current business climate is different and how this is a chal-lenge to a company’s growth and survival .

dr . Glickman was a co-founder of Aspreva Pharmaceuticals and served as Chairman and CeO until 2007 . Prior to that, he was co-found-er and CeO of StressGen Biotechnologies Cor-poration . dr . Glickman was also founder of Ontario Molecular diagnostics, a diagnostic facility that evolved into one of the largest molecular diagnostic laboratories in Canada, and co-founder of Probtec Corporation, a rational drug design and molecular genetics firm, where he established and introduced the first licensed dnA-based forensic and paternity testing services in Canada .

dr . Glickman’s roles on numerous boards have included Chairman of Life Sciences B .C . and director of the Canadian Genetic disease network, a Canadian Centre of excellence . He is currently a member of the British Columbia Innovation Council and Lead director for Cardiome Pharmaceuticals Corporation .

dr . Glickman has received the ernst & Young entrepreneur of the Year 2004 Award for the Pacific region Life Sciences Group and both Canada’s and British Columbia’s top 40 under 40 Award for entrepreneurs .

April 27, 2009 12:00pm – 1:30pm Begbie Room, The Union Club of BC___________________________________

the Psychology of Investing

JOHN NOFsINGer, PhD

Associate Professor University of Washington Lang Fellow, Department of Finance Washington State University

traditional finance provides many tools with which investors optimize expected return and risk, but understanding the motivations

behind investor behavior is extremely impor-tant when applying these tools .

In this presentation, John nofsinger will delve into the psychology affecting investments . He will describe how investors behave, why they behave that way, how such behavior hurts investors’ wealth and what they can do about it . topics include overconfidence, fear of regret and seeking pride, mental account-ing, mood and investing, and self control and decision making .

Mr . nofsinger, is a leading authority on behavioral finance and a frequent speaker at investment management and academic conferences . He often is quoted or appears in the financial media, including The Wall Street Journal, Financial Times, Fortune, Busi-ness Week, Money Magazine, Washington Post, Bloomberg and CNBC .

Mr . nofsinger has authored (or coauthored) seven books which have been translated into six languages . He has also published more than 30 articles in scholarly and practitio-ner journals, and his academic research has won many awards . In addition, he has done research for private investment firms, policy think-tanks, the new York Stock exchange, and the CFA Institute .

April 30, 2009 12:00pm – 1:30pm Begbie Room, The Union Club of BC___________________________________

Perspective on China’s Banking system and exchange rate Policy

steVeN sItAO XU Director, Advisory Services China Economist Intelligence Unit

Join us for a special presentation and evening at the Art Gallery of Greater Victoria . Our fea-tured speaker, Steven Sitao Xu, will address a particularly topical issue of great economic and financial impact: the path that China will follow with regard to its banking system and exchange rate policy .

May 27, 2009 Reception: 5:00pm Presentation: 6:00pm Curator Tour of Edo, Arts of Japan’s Last Shogun Age: 7:30pm The Mansion, Art Gallery of Greater Victoria 1040 Moss Street, Victoria

See page 5 for full event details .

Upcoming CFA Victoria Events

7NewsletterSpring 2009

OfficersPresIDeNt

Andrew Shortreid, CFAVICe PresIDeNt

Jeffrey Hunter, CFAseCretArY

Carolyn thoms, CFAtreAsUrer

trent karl Moore, CFA

Board of directors & Committee Chairs

MeMBersHIPJeff Hamel, CFA

eDUCAtION rob Bennett, CFA

teCHNOlOGYYan Lyesin, CFA

PUBlIC AwAreNessJeffrey Good, CFA

DIreCtOrs At lArGePhilippe Monier, CFA

Jill M . Sing, CFAeDItOr-IN-CHIeF

Gord walker, CFA

CFA Victoria promotes the highest standards of integrity, professionalism

and ethical behaviour within the investment industry, and encourages

professional development through the CFA Program . we facilitate the open

exchange of information and opinions between members of Victoria’s

investment community .

CFA Victoria Mission

2008 / 2009 CFA Victoria Leadership

Members on the MoveJill M. Sing, CA, CFA, CIM, CFP (formerly of CA firm, Hayes Stewart Little & Company)

To

Senior Vice President eFG wealth Management (Canada) Limited jill .sing@efgcanada .com www .efgcanada .com

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displaying an admirable sense of full dis-closure, Mr . Gage advised the audience that this was his sixth time speaking at a forecast dinner and that he had been wrong on all five previous occasions .

Looking back at 2008, Mr . Gage said the is-sue was credit as investors felt an extremely strong desire to delever their positions and gain liquidity . He noted that the return on federal government bonds in 2008 was about 15%, while that on corporate bonds was minus 1% .

Mr . Gage said the credit bubble was caused by bankers having to find ways to give money to consumers, and that it is a mistake to blame China . to illustrate the severity of the bubble’s bursting, he described the explo-sion in credit spreads as a 16 .6 sigma event . Quoting James Grant, editor of Grant’s Interest Rate Observer, Mr . Gage said this was not just a black swan: it was a black swan with two heads and a propeller!

the silver lining for Mr . Gage was that “lenders are finally back in the driver’s seat” because once again “liquidity has value .”

turning to the outlook for equities, Mr . Gage pointed out that for the first time since 1958 the P/e yield was above the bond yield . In 2009, though, he expected stocks to provide a 3 .5% dividend yield with no price appreciation . In the longer term, he foresaw a sea change in investor’s attitudes, with their focus moving away from total return to sustainable return and more stringent balance sheet analysis .

In all, the dinner was a wonderful evening and a milestone in CFA Victoria’s ongoing efforts to encourage the exchange of ideas and opinions within the investment commu-nity . we hope to see everybody again at next year’s dinner to compare notes on how well our predictions shape up against the reality of 2009 .

“2009 Forecast Dinner” continued from page 5.

A Call for VolunteersCFA Victoria depends on

volunteers to enable all of our activitiesandinitiatives.youcanhelp by applying your time and skills in any number of ways. It’sagreatwaytomeetothers

inthelocalfinancialcommunityand show off your talent.

Interested?ofcourseyouare!Contact Andrew Shortreid at

AShortreid@barlowcp.com for more information.

NewsletterSpring 2009

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