Empirical Solutions, LLC

Preemptive Risk Management

Austin • Missoula • Manila

Empirical Solutions

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“If a man will begin with certainties, he shall end in doubts, but if he will be content to begin with doubts, he shall end in certainties.” Francis Bacon
English Philosopher (1561-1626)

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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Risk Management: Who Cares?
!! !! !! !!

Risk management is at the heart of investment management. We are protecting the future livelihood of our neighbors. What is more important than that in the scheme of things? Contrary to the common misperception that risk is about minimizing bad stuff, risk management is actually about achieving substantially greater performance than could ever be achieved without the careful and considerate management of risk.

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Empirical Solutions

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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Risk Management: What Is It?
!! !!

Risk management is the art of maximizing net worth by the skillfully managing drawdowns (not preventing them per se). The risk management landscape for the practitioner today is notable for three massive challenges that we face: (i) economic tensions (ii) fundamental misperceptions about risk and (iii) powerful conflicts of interest that affect the process and beneficiaries more than anyone.

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Risk Management: What Is It?

“It does not do to leave a live dragon out of your calculations, if you live near him.”
J.R.R. Tolkien, The Hobbit

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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RM TERRAIN CHALLENGE #1: Economic Tension
In 2012, CREATE-Research surveyed 289 asset managers, pension consultants, and fund distributors in 29 countries with combined AUM of $25.2 trillion. They asked: do you expect any systemic crises this decade?
"! "! "! "!

27% expect one crisis 35% two crisis 21% three crisis 10%, four or more crises.

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ECONOMIC TENSION: Would you lend to Dufus?
!! !!

You’ve been friends since 1st grade and know his family. Dufus needs $53,000 but you can’t afford a credit loss. Would you lend Dufus cash? Dufus’ Income statement: (2012 fiscal year estimate) Salary: $98,743 Expenses: -151,821 Net loss: ($53,077) (54% of salary) Dufus’ Balance sheet: (as of April 2012) Assets: owns lots of stuff, but nothing easy to value or sell Debt: $634,000 (composed of several different loans) "! Interest rate: 2.6% variable rate (exposed to rate increases) "! Debt Matures in 5.3 years (serious refinancing risk) Contingent liability: $4,000,000 (Dufus, a generous guy, has promised to take care of his family, his wife’s family and his adult neighbors, 36% of whom are obese, and their newly born kids, 41% of whom are expected to be diagnosed with cancer in their lifetime). This liability is therefore difficult to estimate. For reasons beyond my IQ, under current accounting rules this liability is considered “off-balance sheet”.

!!

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ECONOMIC TENSION: Would you lend to Dufus?

NO.

PLAIN AND SIMPLE.

Or as we say here in Texas:

“Not only ‘no’ but!

HN!”
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Disclaimer: Currency trading carries substantial risk of loss, is not for everyone and only risk-capital should be used. Proprietary and Confidential. (© Copyright 2012 Empirical Solutions, LLC. All rights reserved.)!

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ECONOMIC TENSION: What is 25,000,000?

?
Disclaimer: Currency trading carries substantial risk of loss, is not for everyone and only risk-capital should be used. Proprietary and Confidential. (© Copyright 2012 Empirical Solutions, LLC. All rights reserved.)!

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ECONOMIC TENSION: What is 25,000,000?

THE DIVISOR THAT CONVERTS U.S. FEDERAL FINANCIAL STATEMENTS INTO THOSE OF “DUFUS”

!
Disclaimer: Currency trading carries substantial risk of loss, is not for everyone and only risk-capital should be used. Proprietary and Confidential. (© Copyright 2012 Empirical Solutions, LLC. All rights reserved.)!

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ECONOMIC TENSION: Debt – large and growing. End in sight?

"#$#!%&'&()*!+,-.*/01!2&.3!!
+/4!./**/546!57!"$21!
('$!!!" (&$!!!" (%$!!!" (#$!!!" (!$!!!" '$!!!" &$!!!" %$!!!" #$!!!" !" ()'!" ()'*" ())!" ())*" #!!!" #!!*" #!(!"

$17 trillion in total public debt now. $454 billion in interest in 2011 despite historic low rates. What happens if interest rates go up?

Data source: Economic Research Division website, Federal Reserve Bank of St. Louis

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ECONOMIC TENSION: Congressional budget cuts -- LOL?

"#$#!%&'&()*!8-'9&3!$-(:*-6!+2&;0/31!
+/4!./**/546!57!"$21!
%!!" #!!" !" +#!!" +%!!"

2008-2012: $5.5 trillion in cumulative nominal budget deficits; more than the sum of the deficits from 1789-2007.

+&!!" +'!!" +($!!!" +($#!!" +($%!!"

()'!"

()'*"

())!"

())*"

#!!!"

#!!*"

#!(!"

+($&!!"

Data source: Whitehouse.gov website

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ECONOMIC TENSION: Yields at historic lows, despite deficit.

10 Year U.S. Treasury Bond Yield
18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 1981 1986 1991 1996 2001 2006 2011

As interest rates fell 90% from 15.3% in 1981 to historic lows, bonds soared. Now what?

Data source: Economic Research Division website, Federal Reserve Bank of St. Louis

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ECONOMIC TENSION: What are rating agencies smoking?
!! !! !!

Standard & Poor's (S&P) downgraded its credit rating of the U.S. federal government from AAA (outstanding) to AA+ (excellent) on August 5, 2011. [The downgrade was criticized by the U.S. Treasury Department, both Democratic and Republican Party political figures, and many economists.] Both Fitch Ratings and Moody's, designated like S&P as nationally recognized statistical rating organizations (NRSRO) by the U.S. Securities and Exchange Commission, retained the U.S.'s triple-A rating. These are the same agencies that rated billions of now-bust real-estate paper as “investment grade” – using the same logic they use to rate ‘Dufus’. Keeping in mind the graphs we just reviewed together, does ‘Dufus’ look like an AA+/AAA rating to you?

!! !!

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ECONOMIC TENSION: Rapidly shrinking middle-class.

<=&(/0)46!54!"#$#!%55'!$3)=:6!
!+=/**/546!57!0/>?&461!
*!" %*" %!" ,*" ,!" #*" #!" (*" (!" *" !" ()-!" ()-*" ()'!" ()'*" ())!" ())*" #!!!" #!!*" #!(!"

Americans in the U.S. food stamp program more than doubled in the last 10 years.

Data source: United States Department of Agriculture website (SNAP).

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ECONOMIC TENSION: And the list goes on!
!! Global geopolitical unrest !! G-7 unemployment !! Euro disintegration risk !! U.S. educational system !! U.S. immigration policy !! U.S. health care costs/system !! U.S. political deadlock !! U.S. inflation risk !! U.S. tax rate changes (more coming)

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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RM TERRAIN CHALLENGE II: Alarming misperceptions.
1.! Static correlation. 2.! Diversification. 3.! The world is linear. 4.! “Volatility” is bad. 5.! Measuring “risk” using ______ (insert favorite statistic here). 6.! “The safety of” (past performance, bonds and selling losers...). 7.! Story telling about “our edge”. 8.! Liquidity: the illusory benefit.

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MISPERCEPTION #1: Static Correlation.
!! !!

Many of the tools used in modern portfolio construction make explicit assumptions about the correlations between different assets. The problem is that these models often treat “correlation” as though it is a static “thing”, when in fact it changes all the time and can even experience discontinuous jumps, making it a dangerous assumption to rely upon. Worse yet, much like liquidity, it undergoes state changes at precisely the time when you most want stability and are depending on the “uncorrelated” relationships between different assets in the portfolio. Interestingly, correlation is also deceiving to the eye. I’ve created an example of this to share with you on the following page.

!!

!!

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MISPERCEPTION #1: Static Correlation -- continued.

What is the correlation of this Fund’s returns to the Market’s?
6.00% 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% -8.00% -10.00% -12.00% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Fund

Market

These look uncorrelated but are mathematically perfectly correlated.

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MISPERCEPTION #2: You are diversified.
1.! Investment portfolios are perceived as safe because they allocate capital

to a number of “different” categories.
–! One example is the old 40/40/20 structure still used by pension funds: •! 40% in equities •! 40% in bonds •! 20% in alternative strategies (hedge funds etc.) –! Another example is “diversification” within the equity category: •! X% in large cap •! X% in small cap •! X% in growth •! X% in value •! X% in international stocks et cetera –! Do these types of standard allocations reduce risk and protect capital?

(the data on the next page may be eye-opening)

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MISPERCEPTION #2: You are diversified – continued.
!!

Look at equities as an example. It is relatively easy to convince Trustees that their equity bucket is safer because you have “diversified” it across a number of “different” strategies. Sounds logical. And it sells. But, when you look at the numbers, do the facts line up?
–! The S&P500 fell -53% from 1549 to 735 Oct 2007 to Feb 2009 (fact) –! How did the “different” equity strategies perform that same period? !! Small cap (Vanguard SC): -54% (fact) !! Value (S&P500 value index): -57% (fact) !! Growth (S&P500 growth index): -45% (fact) !! International (MSCI EAFE): -58% (fact) –! What do you notice? Where is the “diversification”?

!!

Why is this? Because the key to diversification is creating portfolios where the return signature (timing and magnitude) of the constituent parts are discernably different – and substantiated with numerical data.

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MISPERCEPTION #3: Life is linear and normal.
!! !!

Abundant evidence exists that price and return data is not normal (fat tails, autocorrelation et cetera) yet most models and calculations assume IID. VAR calculations that depend on IID assumptions may be significantly off in determining the probability and magnitude of potential losses.

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MISPERCEPTION #4: Volatility is bad. Volatility is risk.
!! !! !! !!

Volatility just “is” – it is neither inherently good nor bad. Since drawdowns are undesirable (the loss side of the curve), volatility as a stand-alone concept gets a bad rap. The better question to ask is, “what kind of returns are being generated in exchange for the drawdowns being experienced?” Likewise, when looking at one particular asset or asset class within the portfolio, it is useful to understand the extent to which its volatility signature is different from that of other assets in the portfolio. Performance needs to be looked at on a risk-adjusted basis and looking at only one side of that equation is misleading.

!!

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MISPERCEPTION #5: Single statistic risk measures.

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MISPERCEPTION #6: The safety of “track records”.
!! !!

Every sales presentation that passes compliance is required to have a disclaimer that states “past results are no guarantee of future results.” However, that disclaimer is ignored: Wall Street firms and investment advisors actively use track records to sell funds to clients. How come? Because it is one of the most effective sales tools you can use. Why? Human brains are wired to put faith in linear extrapolations – despite abundant evidence that life, and the financial markets, is not linear.

!!

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MISPERCEPTION #6: The safety of “bonds”.
!!

Bonds (fixed income investments) serve as a good example of why it is crucial to evaluate risk on a forward-looking basis and not just extrapolate straight-line estimates going forward:
–! Since October 1981 rates have been falling and bonds have been

soaring in value – a brilliant investment.
–! However, going forward, bonds face sizable systemic risks:

(a) interest rate risk (b) inflation risk (c) credit risk
–! Looking ahead: rates have little left to fall; if rates remain low,

negative real rate erode your principal (bad), if rates rise, you suffer capital losses (bad), and in the interim, credit risk deteriorates (bad).
–! Yields on a variety of industrialized countries have converged at

historically low rates, independent materially different circumstances.

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MISPERCEPTION #6: The safety of “selling losers.”
!!

If you speak with fund managers, they will tell you with near unanimity, that they tend to receive their biggest allocations after the Fund has just achieved a record year in terms of return performance. In addition, they will tell you that they suffer the most redemptions and withdrawals after periods of significant loss. Ironically, if you then ask them when they are most bullish on their performance, it most often is right after they have experienced a large drawdown. Likewise, they tend to be least confident of earning their target returns after a period of significant outperformance to the upside. An alternative approach that we call “Dynamic Allocation” recognizes these behavioral tendencies and invests after drawdowns and disinvests after periods of outperformance after first doing an due-diligence refresh to reconfirm the basis for a given sub-manager being in the portfolio. This approach is particularly important for allocations to hedge funds and CTAs.

!! !!

!!

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MISPERCEPTION #7: Stories Not As Reliable As Facts.
!! !! !! !!

To sell financial products, be they mutual funds, hedge funds, or managed accounts, sponsors all must claim to be different. Why? Because selling investments is really tough if your pitch is, “we just do the same thing as everyone else – allocate to us please...” Therefore, marketing docs and DDQs use words like “proprietary” to imply that their operation is materially different from their category-peers. However, statistically we know most claims of “uniqueness” are untrue (human herding is a proven phenomena). So what? Uniqueness has big risk-implications in the context of portfolio construction. Focus on the facts. The underlying distribution of returns.

!!

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MISPERCEPTION #8: ‘This Is Highly Liquid’
!! !! !!

Liquidity is often an illusion: there in abundance when you do not need it and absent during the times when you most need it; discontinuous. Recall the “auction-rate-securities” fiasco when promised liquidity dried up? Liquidity is sometimes counter intuitive. Google sold off post 2008 not because it was distressed but because it was big and successful and had greater available liquidity and was sold over less liquid securities. The consequence of NOT having enough liquidity when needed is severe:
–! Opportunity cost of being unable to make timely allocation changes –! Undue transaction costs when you sell an asset at a ‘bad time’ –! In extreme cases, not having access to capital when you need it

!!

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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RM TERRAIN CHALLENGE #3: Conflicts of Interest
!! !!

The real-life management of risk is greatly complicated by the existence of behavioral conflicts of interest throughout the business. None of these conflict risks are captured by VAR or any other fancy calculations.

We pass no judgment and are not moralists. We are pragmatists, and that requires acknowledging these conflicts when they exist so they can be discussed and taken into consideration.

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CONFLICTS OF INTEREST: Only 24 hours in the day.
!!

Real-life example: a multi-billion dollar CTA whose name I will withhold loudly markets their 10+ year track record as having a Sharpe Ratio in excess of 1.0 which is extremely good for a single manager strategy. However, when we recreated the calculation, we discovered two issues: 1.! Their statistic was based on “gross” data (before fees) which is deceptive since the investor experience is net of fees. And the net data was not nearly as impressive (without tax-free compounding). 2.! It also turns out that their first 3 years’ performance was fantastic and their last 7 have been steadily declining and below-average, which is obscured by how the data is presented.

!!

In theory, consultants should verify the accuracy of key statistics such as “track records” to ensure the data supports the conclusion. With limited time and resources, however, there is an incentive to trust the calculations, especially when they come from larger and well established firms. Why? Saves you time. Better risk management? No.

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CONFLICTS OF INTEREST: Gotta hit our budget. Sell, sell sell!
!!

Consider that at some point, due to macro economic and interest rate reasons, buying bonds will not make sense. But!
–! Self-interest: if you are a senior MD at a Large Bracket Investment

Bank and you oversee the Fixed Income operation that generates $15bn a year in revenue for which you earn a $15mm bonus per annum, would you ever pour cold water on your sales desk, even if you were selling stuff that you knew was not all that great? HN!
–! Profit: do you realize how much money financial advisors and Wall

Street earn as a percentage of total bond returns? Almost 40%!
•! As of 2008: Avg. 5 Yr. Trailing Bond Fund Gross Return: 4.32% •! The average fees were 0.68% and typical RIA charges 1.0%+ •! Gross 4.32% less .68% (fund manager fees) less 1.0% RIA fee

= 2.64% net to the investor. 2.64% / 4.32% = 61% •! Wall Street and Financial Advisors were taking 40% in fees!

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CONFLICTS OF INTEREST: Flawed fee structures.
!!

Many fee structures in the business are deeply conflicted. They are explained in the context of conversations where we hurl loving phrases to each other like, “We value your business” or “We have your interests at heart” or “We put the client first” on and on. However, the risk of loss is disproportionately shouldered by the Plan or the investor – not the investment manager. Likewise, in order to win allocations, fund managers must say something like “we are focused on protecting capital and managing risk” multiple times to win the trust of the allocator but in fact the risk taken to earn returns is not factored anywhere into the fee models out there today – which are largely driven by nominal returns. This is an enormously important topic in and of itself and we can send you a white paper on this upon request that was published by the CFA Institute.

!! !!

!!

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CONFLICTS OF INTEREST: Industry challenge.
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” Upton Sinclair

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CONFLICTS OF INTEREST: Benchmark Incentive Risk.
!!

Benchmark incentive risk is one of the biggest sources of conflict of interest in our business when it comes to risk management and a classic example of unintended consequences. When Pensions and Trusts hire investment consultants, they obvious need to find a way to evaluate them other than on their table manners and knowledge of wine. Evaluating investment consultants based on performance relative to a benchmark is meant to create accountability. However, using benchmarks to grade their performance paradoxically creates a disincentive for the consultant to protect capital from loss. This may seem far fetched, but the simplest proof is to just look at 2008 and 2009 behavior and results. What did we see? Huge losses and the distinct absence of aggressive allocations into distressed asset classes (missed the boat on one of the best buying opportunities of this decade). Why? See next page.

!!

!! !!

!!

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CONFLICTS OF INTEREST: Benchmark Risk -- continued.
!!

Consider the following chart that lays out the incentives in win / loss scenarios for consultants and the pension plans in this example:

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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SUCCESSFUL RM PROGRAM: The four key elements.
1.! Data: why firms like First Rate play such an important role. They ensure

data integrity and calculations are consistent and transparent.
2.! Action: risk management is expressed in the form of action. The risk

management plan, if not taken action on, creates zero value. Actions ultimately take the form of allocation and de-allocation and if not defined in advance, will be subject to too much emotion or not happen at all.
3.! Judgment: you need to understand that risk is management on a forward

looking basis, and therefore past data is not a passport to heaven. You need to organize your analytics around distributions not averages. And you need to navigate around the misperceptions discussed earlier.
4.! Buy-In: stakeholder buy-in is key. Why? Because it is the only practical

way to navigate the challenges posed by conflicts of interest. Stakeholders need to have a clearer understanding of the trade-offs and take more of the right risks and better avoid conflict driven return-drag.

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BRIEFING AGENDA
1.! Risk Management: who cares? 2.! What is risk management? 3.! Modern RM Terrain I: Economic Tensions 4.! Modern RM Terrain II: Risk Misperceptions 5.! Modern RM Terrain III: Conflicts of Interest 6.! Four Key Elements To a Successful RM Program 7.! Numbers Tell All: Eye Opening Math

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EYE OPENING MATH: Let’s start with the basics.
!!

Let’s review the basics of loss-math:
1.! Beginning period loss example: if a Plan loses 30%, then it must

earn 43% to get back to break-even. Therefore, it has 43% MORE to earn than it lost (43/30) to get out of the hole.
2.! End of period loss example: a 10% return for 10 years produces an

annualized return of 10%, right? By contrast, what if you have 9 years with a 10% return and then in year 10, you lose 30%? This reduces the annualized return over the period to slightly more than 5%. This is a near 50% reduction on an annualized basis! In this example, if your return horizon was ten years, the loss could be catastrophic.
3.! Both of these examples get worse once you take fees into account.

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Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

EYE OPENING MATH: Example of loss impact on the S&P.
!!

Keep in mind the necessity of looking at risk as a distribution and not just a single averaged statistic – the average loses critical information:
1.! 8.66% = an example of the “average statistic” -- that Dr. Sam Savage

warns about in his brilliant book, The Flaw of Averages – it is the annualized return of the S&P from 7/1/1993 to 6/28/13.
2.! During this period there were 5,036 trading days. The average does

not tell us anything about the underlying distribution of positive and negative daily returns.
3.! Question: what would the annualized return be over the same

decade if you eliminated the worst 50 trading days, which represents only 1% of the trading days during that period?
4.! Answer: 23.3%. Nearly four times higher! What does this tell you?

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46

Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

EYE OPENING MATH: The upside alpha of risk management.
Here is an example from the 2008/2009 time period that illustrates the enormous “alpha” that risk management can generate:
1.! Plan A: assume it had $500mm invested entirely in the S&P500 as of

October 2007 and kept its allocation unchanged. It is the poster child for the “held for the long term” strategy.
2.! Plan B: also started with $500mm allocated to the S&P500 but had a

drawdown management plan struck at 25% (meaning, it kicked in at the point where losses of 25% were incurred).
3.! Plan C: are implementing the same plan as Plan B, but only succeed

at preventing half of the loss below the same strike down 25%. How significantly do you think their results would differ?

Copyright 2013 Empirical Solutions, LLC. All rights reserved. www.empiricalresults.net!

47

Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

EYE OPENING MATH: The upside alpha of risk management.
Plan A (static) Starting capital (10/7) Max Drawdown (2/09) Cumulative return (5/13) X’tra Cap Inv’d at N Annualized return Ending Balance (5/13) $500mm 51% (unprotected) +22% -3.2% $610mm Plan B (used RM @ 50% R) $500mm 25% (100% eff. Struck @ -25%) +86% (4x) 53% more ($130mm) 10.5% (3x) $932mm ($322mm more) Plan C (used RM @ 25% R) $500m 37.5% (50% eff. struck @ -25%) 55% (>2x) 27% more ($67mm) 7.3% (>2x) $777mm ($167mm more)
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Copyright 2013 Empirical Solutions, LLC. All rights reserved. www.empiricalresults.net!

Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

Contact Information
Stefan Whitwell, CFA, CIPM (Austin, Texas) office: (877) 936-3372 ext. 701 cell: (917) 214-6833 email: stefan@empiricalresults.net

Copyright 2013 Empirical Solutions, LLC. All rights reserved. www.empiricalresults.net!

49

Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

The Firm: Independent and Experienced
!! Registered Commodities Trading Advisor (“CTA”) with the CFTC. !! NFA Member Approved (ID #0424405). !! Management has over two decades of practical, hands-on currency and risk-management experience. !! Owned by management. No external affiliations (no conflicts). !! Clients include both U.S. based firms and international businesses. !! Empirical also operates under the “Currency Risk Management, LLC” moniker in both the United States and in Asia.

Copyright 2013 Empirical Solutions, LLC. All rights reserved. www.empiricalresults.net!

50

Empirical Solutions

PREEMPTIVE RISK MANAGEMENT | Protect. One Client at a Time.

Management Background
Stefan Whitwell, CFA, CIPM, Managing Director !! !! Two decades of investment and risk management experience; expertise includes both traditional and alternative assets. Previous experience includes institutional and hedge fund coverage at Credit Suisse First Boston and Goldman Sachs, and mergers and acquisitions investment banking at James D. Wolfensohn, Incorporated. Awarded the Chartered Financial Analyst designation (Charter #40140) in 2000 and the Certificate in Investment Performance Measurement (Certificate #000892) in 2012 by the CFA Institute. Served on one of the CFA Exam standards setting committees for the CFA Institute in the summer of 2012. Graduated from the Wharton School at the University of Pennsylvania with a Bachelor of Science in economics and concentration in finance. Listed with the National Futures Association as Principal, registered as an Associated Person, Forex Associated Person and Associate Member of the National Futures Association (NFA ID #0277030).

!!

!! !!

Copyright 2013 Empirical Solutions, LLC. All rights reserved. www.empiricalresults.net!

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