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CPT Workshop - Cross-Capital Alpha: Combined Equity/Credit Analysis and Investing [Complete] Event Code: 190528W
Date 28-May-2019
Time 1:30 p.m. - 4:30 p.m.
Venue HKSFA Office, 14/F, BOC Group Life Assurance Tower, 136 Des Voeux Road Central, Hong Kong
Speaker(s) Mr. Joel Litman, CPA
President & CEO, Chief Investment Strategist
Valens Research
Fee HKSFA Member(s) at HK$1,000.0/person
CFA Candidate(s) at HK$1,250.0/person
Guest(s) and Non-member(s) at HK$1,500.0/person
This seminar is qualified for 2.5 CPT hour(s), 2.5 CE hour(s), 2.5 RBV CPD hour(s)
Remarks
  • Only Visa and Master Card are accepted for online payment.
  • The fee includes course materials.
  • For attendance-taking purpose, participants’ names and company name (if any) will be given to the speaker at this workshop.

Event Details Add to Calendar

“You can’t be a great equity investor without being a solid credit analyst.”

This groundbreaking cross-capital credit-and-equity program will be presented in Hong Kong, having received tremendous reviews from CFA Societies in New York, London, Singapore, and other societies and investment managers.

Some of the top fund managers in the world have extolled the virtues of following the credit markets to understand equities, and vice versa.

However, seldom do the great investors share the analysis they use to accurately understand credit worthiness, credit markets, or credit crises. Even less do they show how they tie credit analysis to equity investing, or equity analysis to credit investments.

In this afternoon program, Professor Joel Litman shares insights on how this type of credit analysis is performed. Litman has worked closely and advised some of the world’s largest investment firms - particularly in the area of cross-capital analysis.

The first point of focus for this workshop is directly in the heart of financial analysis for determining credit health and equity valuations.

It is the undeniable fact that traditional financial analysis, and the financial statements themselves, are terribly, horribly flawed and lead investors astray.

In the words of Warren Buffett, “People who use EBITDA are either trying to con you or they’re conning themselves.

Despite his comment, how often have you seen EBITDA in some form or iteration of credit research?

In the words of the great Marty Whitman, “GAAP financial statements are not truth or reality.

This is not simply a problem with US accounting and financial statements. The famed international investor Jean-Marie Eveillard said, “Always restate financials…” referring to those under IFRS.

The top equity investors in the world have been quite outspoken about the failure of reported GAAP and IFRS earnings and other metrics.

This workshop shows how great investment houses rip apart the financial statements to produce better analytics, better credit research, and superior credit and equity investing because of it.

The second point of focus for this program connects credit to equity investing, both by single securities and in macroeconomic contexts.

Research of 150 years of investment cycles provides the basis for the Market Phase Cycle, a methodology for understanding longer-term credit and equity market movements and trends.

At the heart of virtually every major equity market collapse in the last two centuries has been a credit seizure of significant proportions. Seeing how these have formed provides incredibly new, valuable insights into how markets behave, why, and most importantly, when.

In the words of one of the world’s most successful cross-capital investors, Mitch Julis of Canyon Capital, “Without the firm handle on the flexibility that credit analysis provides, we'd argue you can't fully understand the wealth-creation process as an equity investor.”

In this program, Professor Joel Litman covers both bottom-up corporate credit analysis and top-down macro credit signals with direct application to:

  1. Advanced methodologies for corporate credit analysis such as Intrinsic CDS;
  2. Surfacing new corporate credit and related equity ideas;
  3. Evaluating existing corporate credit holdings and credit markets;
  4. Determining the impact on individual equities and equity markets as a whole.

Professor Litman demonstrates how solid corporate credit research has driven amazing equity investment opportunities, both long and short.
 

Highlights of the Workshop:

  • What's horribly wrong with credit research 10 years ago and remains terrible today
  • Why the world’s top investors are turning away from GAAP and IFRS to advanced, adjusted, apples-to-apples playing fields of financial statement analysis such as UAFRS
  • Garbage In, Garbage Out: The state of financial statement distortions in as-reported earnings, assets, liabilities, and even cash flows are today killing investment returns and investment processes
  • Advanced corporate credit worthiness and default research with Uniform Accounting and Uniform Financial Analytics
  • Analytical Advantages: Given the data already publicly available, some of the worlds top investors have built superior analytics to allow them to succeed. Some of the world's greatest Quants fall into this category such as Blackrock, Dimensional, and AQR.
  • Case after case of real examples of how investors have gained legal informational advantages that led to phenomenal stock picks, including high-yield credit analysis - where the ratings agencies go horribly wrong
  • The limitations of even the best financial analysis: when the attorneys or activists get involved
  • Rebuilding ratings - Superior methods for analyzing and valuing credit investments
  • CASE STUDY: In January 2015, Barron's highlighted AMD (AMD) as a long idea at $2.60 per share. The stock had been depressed by headline bankruptcy concerns. UAFRS showed strong underlying cash flows that GAAP did not. AMD's stock has hit $30 since.
  • Relationships between CDS, equity valuations, and derivatives
  • CDS and Intrinsic Credit Default Swap signals for credit and equity investing
  • The Market Phase Cycle of equity and credit aggregate macroeconomic signals
  • Interest rates, yield curves, and the benefits and pitfalls of recession predictors
  • Analyzing the highest alpha-generating investors in history and similarities in their investing processes in credit and equity macro investing
  • Where are we now? Current signals and analytics for the current bull/bear markets underway globally

Professor Litman describes state-of-the-art practice in high yield credit analysis and portfolio management techniques.

The program draws insights from some of the greatest investors in the world who have used credit and equity research together in powerful ways.

One strong focus of the program is the need to completely overhaul financial statement analysis and credit analytics to better understand corporate credit.

Please join us for this afternoon of deep analytical insights and extremely practical alternatives to traditional analysis. Credit, equity, and macroeconomic analysts from the buy-side and sell-side have given this program very high ratings and comments at prior CFA Society events.

 

About the speaker

Mr. Joel Litman, CPA
President & CEO, Chief Investment Strategist

Valens Research
 

Mr. Joel Litman is President and CEO of Valens Research, a global investment research and advisory firm, and the world leader in Uniform Accounting and analytics.

In the Harvard Business Review, Litman published, “Give My Regrets to Wall Street,” and is a top contributor in SeekingAlpha. Valens Research reports are regularly the most downloaded on Factset. He has been interviewed on CNBC, Forbes.com, the Singapore Stock Exchange, the Wall Street Journal’s Barron’s Magazine, Institutional Investor, and regularly at NASDAQ’s Marketsite.

Litman has conducted seminars and lectures for Harvard Business School, Wharton, London Business School, and other universities and CFA societies in New York, Germany, Hong Kong, Singapore, and more around the world.

Litman is a CPA and an MBA/MM graduate from the Kellogg Graduate School of Management at Northwestern University. He is a member of the Board of Directors of COL Financial Group (PSE:COL).



Rating - Intermediate 
(Material presented will have technical elements requiring a working knowledge of the subject to make full use of the presentation.)