You’re getting smarter about writing investment and financial communications, so I’m giving you a challenge: watch this video and then tell me what lesson it teaches writers.
I look forward to hearing from you!
So many great emerging markets presentations, so little time to blog about them.
Below you’ll find quotes or paraphrases of opinions voiced by speakers at the CFA Institute’s “Investing in Emerging Markets” 
conference held in Boston on October 19. If these snippets pique your interest, watch the CFA Institute website for podcasts or other records of selected presentations. Also see my recent blog posts, “Bubble?–Emerging markets scrutinized by CFA Institute conference,” “ISI’s Straszheim: China’s interest rate hike is ‘tapping the brakes’,” and “Cautious optimism on emerging market stocks from SSgA’s Hoguet.”
Paulo Vieira da Cunha, Tandem Global partners
Kristen Forbes, MIT Sloan School of Management
Sivaprakasam Sivakumar, Argonaut Global Capital
Tina Vandersteel, Grantham, May, Van Otterloo & Company
Cliff Quisenberry, Caravan Capital Management
AlisonAdams, Alison Adams Research
Is now a good time to invest in emerging markets?
The answer depended on which speakers or attendees I listened to at the CFA Institute’s “Investing in Emerging Markets” conference held in Boston on October 19.
The overall mood was cautiously optimistic for the long-term. “We’re not in a bubble yet,” said George Hoguet of State Street Global Advisors, who also mentioned some concerns about emerging markets.
At least one speaker said some emerging markets are already in a bubble and several attendees told me they’re waiting for a pullback before they put money into emerging markets.
It’s not only emerging market stocks that worry investment professionals. While some investors are eager to pick up an extra six percent (600 basis points) or so by investing in emerging market debt, Grantham, Mayo, Van Otterloo & Company’s Tina Vandersteel suggested that emerging market bonds may not be as safe as you think. This is especially true of external debt, which has a 32% probability of default vs. only 2% for local debt, although spreads of about 3% (300 basis points) provide a cushion for defaults, she said.
What about you? Are you ready to invest in emerging markets today?
Emerging markets have been hot enough that the CFA Institute organized a one-day conference on the topic, held in Boston on October 19.
Here’s how George Hoguet, global investment strategist specializing in emerging markets at State Street Global Advisors, summed up his outlook when he spoke about “Decoupling or Contagion: How Will Fiscal Consolidation in Developed Markets Impact Emerging Markets?”:
The Great Recession has enhanced the secular case for investing in emerging markets, but the reduction in potential GDP growth in many developed markets will negatively impact emerging markets.
One of Hoguet’s comments resonated with me more than the others: “Japan as Number 1 is a reminder of the difficulty of long-term forecasting.” 
As a former teaching assistant for author Ezra Vogel, I remember the uproar about Japan’s predicted domination of the global economy. The Land of the Rising Sun had seemed unstoppable, which worked to my benefit when I led training seminars on “How to Do Business with the Japanese.” My, how times have changed.
Another warning from Hoguet: Economic growth does not necessarily lead to superior investment returns, as Korea shows. Still, he suggested that investors focus on large economies with sustainable domestic demand. He also recommended that investors overcome their home-market bias to market-weight emerging markets and be open-minded about newer types of investments, such as farm land and long-short funds.
One of the many pluses mentioned by Hoguet was that debt/GDP ratios are lower for emerging markets than for developed countries. In addition, current emerging markets are not “demanding” at about 13-times-earnings for the next 12 months,
“We’re not in a bubble yet,” concluded Hoguet.
“China raised interest rates and everybody is all upset about that,” said Donald Straszheim at the start of his Oct. 19 presentation on “China’s Growth Prospects and Risks” to the CFA Institute’s “Investing in Emerging Markets Conference.” Earlier on Oct. 19, China raised borrowing and deposit rates by 0.25% (25 basis points).
But Straszheim, the head of China research for ISI Group didn’t seem upset by China’s rate hikes. Instead, he presented it as a reasonable way to “tap on the brakes” to slow China’s economic growth. Looking at the history leading up to the rate hikes, Straszheim said that China implemented a big stimulus following the 2008-2009 economic meltdown. This led to China overheating later in 2009 and into 2010. Although attempts to slow the economy to engineer an economic “soft landing” were having an effect, inflation was at 3.5% and rising too quickly. Food, which makes up more than 30% of China’s consumer price index, could potentially boost the country’s inflation to 5% as a result of weather issues, said Straszheim. Also, the economy is still strong and the housing market is booming. Hence, the rate hikes.
“I don’t think this is the beginning of the end,” said Straszheim. “I don’t think this is the beginning of another major tightening cycle,” although more rate hikes may follow.
China is heading for a “soft landing” and is likely to experience 3%-4% inflation and 8% growth in 2011, added Straszheim.
China’s fastest economic growth is behind it, said Straszheim, for the following reasons:
Straszheim’s predictions for China’s economic growth are
China faces some challenges:
Despite the challenges, Straszheim expects China will grow faster than much of the rest of the world for a long time to come.
Pat Allen of RockTheBoatMarketing is one of my “go to” people when I’m looking for information on how asset managers use 
social media. If you’re interested in tracking this topic, follow Pat’s Twitter feed at RockTheBoatMKTG and check out her Twitter list of investment managers. If your interests focus more on financial advisors, then Pat’s AdvisorTweets Twitter account is for you.
In her guest post below, Pat suggests that investment analysts and portfolio managers need to learn how to do research using social media or risk missing–or being late to obtain–information that influences the prices of securities.
By Pat Allen
Institutional analysts and investors rely most on information that comes directly from companies.
This was a finding in a survey conducted last year by the Brunswick Group that I remember reading and finding unremarkable. And yet it’s increasingly obvious that corporate information can be relied upon for a company’s plans and intentions—but how an organization moves forward will be influenced by a marketplace reacting in real-time.
To be sure, that complicates things and not just for corporations pursuing business agendas but also for analysts and investors trying to assess companies’ prospects.
Social media is messy. There are zillions of media and networking sites and blogs, lots of noise and plenty of false signals. Still, we think it’s a faulty investment decision that’s made today without consideration for what consumers and influencers are saying.
Gap’s October 4 introduction of a new logo is a recent case in point.
In an October 7 essay on the Huffington Post, Gap North America president Marka Hansen explained that the company’s product selection and retail presence was evolving.
“The natural step for us on this journey is to see how our logo–one that we’ve had for more than 20 years–should evolve. Our brand and our clothes are changing and rethinking our logo is part of aligning with that,” wrote Hansen.
“The natural step for us on this journey is to see how our logo–one that we’ve had for more than 20 years–should evolve. Our brand and our clothes are changing and rethinking our logo is part of aligning with that,” wrote Hansen.
Not so long ago a company executive might have mentioned a new logo on a conference call. If the company’s marketing was believed to be stale and a growth inhibitor, a rebranding plan might have bolstered investor confidence–if only temporarily–prior to the market’s reaction to the change.
In thinking about this post, I flashed back to Peter Lynch’s One Up on Wall Street: How to Use What You Already Know to Make Money in the Market. I was pretty green when I read that book but even then I was skeptical about Lynch’s thesis. Listen to what shoppers said at one store in one mall and invest based on that? I had my doubts and there was something about it that I found condescending. Surely that’s not how professional investors did it?Institutional analysts and investors rely most on information that comes directly from companies.
But Lynch’s recommended approach foreshadowed what is today called online listening. The difference today is that the vast majority of social media sites are architected to serve as databases—easy for interested parties to query, filter and subscribe to for efficient listening and ongoing temperature-checking.
Company information, primary market research, real time subscription information services, analyst research, the business media—all are inputs that ranked higher than “new media” in the 2009 Brunswick research into what influences analysts’ decisions or recommendations. New media, defined as blogs, message boards and social networking sites, were consulted by just 4% of respondents.
The next time such research is conducted we’d expect the monitoring of new media to soar as professional investors learn more about social influence.
Pat Allen is a Chicago-based digital marketing strategy consultant whose Rock The Boat Marketing firm helps investment companies think through what they do on the Web. Pat also operates AdvisorTweets.com, a site that aggregates the tweets of U.S.‐based financial advisors.
Mutual fund marketing is the focus of this week’s guest post by Dan Sondhelm. His post originally appeared on SunStar Strategic’s FundFactor blog.
by Dan Sondhelm
Growing a fund requires similar specialized knowledge and attention. According to Morningstar, in the open-end mutual fund industry of over $7 trillion assets, the top 10 fund firms hold 58%. That’s one big tomato! The next 40 hold 28%, while you and the remaining 600 plus firms compete for the remaining 14%. And, fund flows follow a similar pattern.Like growing tomatoes, gaining visibility – and resultant sales – requires commitment. As a small firm, you’re competing for attention with firms who spend significant dollars on their marketing activities, both in the advisor market and at the retail level. They spend hundreds of thousands of dollars for TV commercials, glossy magazine style annual reports and sponsorships with major distribution platforms and public venues.
Making the Commitment to Grow.
Distribution is at the heart of the potential for success. But just getting on platforms is the equivalent of tossing your tomato seed in the dirt and hoping for the best. Successful distribution lies in nurturing the effort. Like adding water and light, protecting from the frost and spraying for bugs, growing your fund requires consistent attention. You have to ensure you’re in the right channels, and that advisors and investors know you, know your people and know your products.
We understand smaller firms are often made up of a handful of people. Not all firms can afford a wholesaling staff or have resources to sustain a significant marketing presence. So, how do you make it work?
Design a Distribution Strategy.
Write it down. Make someone accountable for each step. We all know that what gets measured gets done. Traditional marketing wisdom says you must address the four P’s: Product, Price, Place (Platforms), Promotion. This applies to fund distribution, too. But what about a fifth P, Performance? It’s true, not many investors will flock to a poor performing fund, but relying solely on performance is risky business. While performance may get you your 15 minutes of fame, performance chasers will drop your fund for the next hot item if they don’t really understand your investment philosophy and process or know the fund manager well.
Cover all the bases
Product
• Build a story around your investment process that highlights the opportunities of your asset class and process and differentiates you from your competition.You can never learn too much about how to give an effective presentation, especially about weighty topics such as investment management. That’s why I logged into “Presentation Skills for Investment Professionals,” a recent presentation to the CFA Institute by Dave Underhill of Underhill Training & Development.
Some of Dave’s advice resonated with advice I give my writing students. For example, don’t get deep into details before you tell your audience the value of what you’re discussing.
“Take a tsunami of data and boil it down to most important point,” said Dave. It’s a mixed metaphor, but I love his point. Look at the data and pretend you’re an audience member asking “So what? Why should I care about this?”
This is a topic I’ve addressed in “Focus on benefits, not features, in your marketing.” As I say in my writing workshops, your audience is looking for the WIIFM, which is short for “What’s In It For Me.”
Don’t make your presentations too long. Allow time for questions, suggested Dave.
Figure that one PowerPoint slide will 60-90 seconds to discuss. For goodness sakes, don’t READ your slides, as I did when I first started speaking in public.
Among the techniques that Dave uses to improve the power of his presentations are:
I was very touched that Dave took the time to email an answer to the question I’d sent in. It was a question without broad audience appeal, but he answered anyhow. That’s a classy thing to do.
To learn more of Dave’s tips, register to watch the replay of “Presentations Skills for Investment Professionals.”
Investment marketers want to know what’s driving financial advisor behavior, so I asked Lisa Cohen, CEO of Momentum Partners, for a guest post.
Financial advisors, what do you think of the RepThinkTank findings that Lisa discusses? Are you–like the advisors whom she mentions–planning to increase allocations to emerging markets and international stocks?
By Lisa Cohen
We thought you might. We did too. The recently-released first report in the RepThinkTank Distribution Dynamics series provides 
comprehensive information on investment selection and asset allocation trends. The study includes data from more than 1,000 financial advisors across all channels.
Key findings include:
The complete report is available from any of the RepThinkTank partners and is priced at $7,500. RepThinkTank is an experienced, integrated team of leading financial services research, advisor practice management, and advisory firms. Learn more at www.repthinktank.com. You can contact Lisa at 866-995-7555.
SeekingAlpha.com looks like a great way for investment professionals to share their opinions and market themselves. So when I met Geoff Considine and learned he’d done exactly that, I asked him to guest-blog about his experience.
How Seeking Alpha Can Build Your Professional Reputation
by Geoff Considine
Writing for SeekingAlpha.com has helped me develop my professional reputation and gain attention for my quantitative modeling 
software and consulting services. Financial professionals can build a substantial brand from SeekingAlpha. Quite a few writers, advisors, consultants, and others have developed enormous reach on the basis of SeekingAlpha. I am certainly not even among the most successful.
If I can do it, so can you, especially if you follow the six rules I give at the end of this article.
My experience publishing on SeekingAlpha.com
I have been writing for SeekingAlpha.com since January 2006. At that time, I had fairly recently launched a software tool for financial advisors and individual investors and I was trying to drum up some attention. All in, I have written 127 articles on SeekingAlpha.com, even though I have not written for them since September 2009. I have written a lot over the last year, but I have developed a sufficiently deep audience that I have only been writing for advisor-focused publications such as Advisor Perspectives. I am quite confident that I never would have been able to write for these professional publications without the experience and reputation gained from writing for SeekingAlpha.com.
Quantext, my small company, gets about 100,000 hits a month on its website in a good month. I sell software and e-books, along with doing consulting on analytical models for portfolio management and asset allocation. The only marketing that I have ever done for my business is writing—and SeekingAlpha.com was the only place that I published articles (aside from my own website) in the first couple of years of building out the software side of my business.
Once something is published on a site like SA, people will go back and look at what you have said in the past—it’s a fairly permanent record. This can be great when your thinking is validated, but can pose reputational risk if you make some outlandish statement. Back in 2007, for example, one of The Motley Fool’s best-known columnists came out and said that he risk measures such as Beta and volatility just didn’t matter at all, not matter what all the academics say. His timing was very unfortunate. Investors who ignored standard risk measures are likely to have suffered disproportionately large losses in the subsequent decline. This type of reputational risk is quite easy to avoid if you stay away from making assertions in articles that strain common sense or that fly in the face of all standards of practice.
One of the ways to build credibility with articles is to identify thought leaders with whom your thinking is consistent. One of my early articles looked at Berkshire Hathaway’s portfolio using my portfolio analysis software. My software identified a number of ways that Berkshire’s portfolio looked very attractive. If my analysis had suggested that Warren Buffett didn’t know what he was doing, I would have had something of a problem. I have also analyzed portfolios and strategies proposed by David Swensen (head of Yale’s endowment), Mohammed El-Erian (co-head of PIMCO), and Jeremy Grantham.
The previous paragraph notwithstanding, I am not suggesting that writers steer away from controversy. If you can make a really solid case for a contrarian theme and publish it in an open forum, you can really stake out territory for your thought leadership. One of my major early themes that I wrote about in 2006-2007 was that there were a number of really robust reasons to believe that market volatility would skyrocket. This theme in a number of my SA articles got the attention of an editor at Kiplinger’s and resulted in an interview that appeared in the magazine in early 2008. As the market conditions have evolved, my writing on this theme has continued to get me very positive attention.
If SA is so great, why don’t I publish much there anymore? The answer is that I have found that my audience is mainly professional advisors, there are better publications to reach this targeted audience, and I get paid to write these days. There is a significant opportunity cost for me to write a piece for SA. If I have more time on my hands in the future, I would certainly put more pieces in SA.
How YOU can thrive on SeekingAlpha.com
There are a few guidelines that I would offer for financial professionals who want to use Seeking Alpha to develop their professional brands:
1) Make sure that you have something to say, and good arguments to support your ideas
2) Craft your writing carefully
3) Use feedback on your articles to develop your writing style
4) Respond to comments—be an active member of the community
5) Write regularly and consistently
6) Learn your special niche
Seeking Alpha can be a powerful channel for reaching your audience, but you need a long-term strategy for how to tap this channel. If you simply plan to write one article, SA won’t do much for you. If you write a consistent series of articles that is well articulated and make sense, SA can be enormously powerful. When I started writing there, I thought of SA as a somewhat narrow channel for getting my ideas out there. Whether or not I was correct then I am not sure, but this is certainly not the case today. SA has enormous reach.