John Chambers, CFA, @ S&P = Gold Standard Integrity!

Welcome to TishTrek - THE JOB BLOG!

As I've explained in previous posts, hiring high caliber talent is the key to competitive advantage. I've enjoyed the privilege of helping multinational corporations reach their goals one new hire at a time for over 20 years. During that time, I've been directly responsible for sourcing, identifying, recruiting and hiring literally hundreds of Financial Engineers/ Analysts who assess & forecast credit and operational risk as part of their responsibility to the investors and institutions they are accountable to.

This weekend as a result of the downgrade of U.S. credit to double-A+ from Triple A, we are watching an unprecedented & massive attack on Standard & Poors and S&P executive John Chambers who is being called, "the Wall Street bean counter who trashed America's global credit reputation," under headlines that scream, "Downgrade 'doer' was no biz wiz." Who do these writers think they're kidding?

I wrote the following letter to the editor to The New York Post this morning because their vicious attack on Mr. Chambers left me wondering why their reporters didn't research what a 'Chartered Financial Analyst' is or what it takes to become one.

People who want to intelligently argue the merits of the downgrade with facts that can counter S&P's arguments for downgrading U.S. credit should come forward and make their case. Obnoxious verbal tirades directed at Standard & Poors and vicious personal attacks directed @ S&P's in-house messenger John Chambers - do nothing to promote solutions and only serve to divert energy and time away from solving these critical issues of our time.

HELP WANTED: Leaders who can assess S&P's long-overdue & strong message, as well as the spending, debt, and credit issues that put our nation in this position in the first place.

-TishTrek

----- Original Message -----
From: Tish Ferguson
To: letters@nypost.com
Cc: jcrudele@nypost.com
Sent: Sunday, August 07, 2011 9:50 AM
Subject: John Chambers @ S&P: Gold Standard Integrity vs 100 PhDs


Dear Editor,

Inside rating agencies, teams of PhD professionals execute risk assessments, not one man. S&P's John Chambers is a Chartered Financial Analyst, (CFA), which is considered a gold standard credential in the field of investment analysis, so kudos to him for having the 'management courage' and guts to call the U.S. credit situation exactly as he sees it.

As a CFA, Mr. Chambers is trained to operate with 'business integrity' - which includes the 'ethics' that went missing for ten years as financial engineers/ analysts were pressured to create the bogus algorithms & rating formulas which hid the systemic risks of the mortgage/subprime/CDO disaster.

Respectfully submitted,
Tish Ferguson
2404 Maria Place
Pt. Pleasant, NJ 08742
732-259-2780 - Cell


I Google 'Chartered Financial Analyst' to get my hands on some content that could counter the arguments of ignorant talking heads who are operating without a clue...

• Many high caliber/ best-in-class Financial Engineers make it their business to become Chartered Financial Analysts. A focus on the CFA Certification curriculum - which I’ve included below - supports the fact that these positions can easily be grouped across businesses because they are part of a job category which demands objectivity and qualifies for international professional designation by a Certified professional organization recognized worldwide.

• The focus on ETHICS, Quantitative Analysis, Economics, Accounting, Security Analysis and Portfolio Management in this profession is universal in scope and literally applies to all industries from financial services to pharmaceutical, (and all asset classes). The calculations and financial models executed by a Financial Engineer in any unit requires a valuation,(***see definition below), the process of estimating the potential market value of a financial asset or liability. The valuation is data that is relied on to forecast whether the incorporation of a financial instrument into a portfolio will benefit the stakeholders the Financial Engineer is accountable to.

• The work of a Financial Engineer helps drive business decisions on issues like asset allocation, portfolio risk and performance, etc. All these benefits are the direct result of the Financial Engineer integrating independent market data, transparent financial and risk reports, complex data and financial models and proprietary valuations for any company that is trying to estimate the potential market value of a financial asset or liability.


***In finance, valuation is the process of estimating the potential market value of a financial asset or liability. Valuations can be done on assets (for example, investments in marketable securities such as stocks, options, business enterprises, or intangible assets such as patents and trademarks) or on liabilities (e.g., Bonds issued by a company). Valuations are required in many contexts including investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation.


"CFA Certification actually strengthens the objectivity of an organization & bolsters credibility." - Tish

Chartered Financial Analyst (CFA) is an international professional designation offered by the CFA Institute (formerly known as AIMR) to financial analysts who complete a series of three examinations. In order to become a CFA Charterholder candidates must pass all three six-hour exams, possess a bachelor's degree (or equivalent, as assessed by the CFA institute) and have 48 months of work experience in an investment decision-making position. CFA charterholders are also obligated to adhere to a very strict Code of ETHICS and STANDARDS governing their professional conduct.

The curriculum includes:
• Ethical and Professional Standards
• Quantitative Methods (such as the time value of money, and statistical inference)
• Economics
• Financial Reporting and Analysis
• Corporate Finance
• Analysis of Investments (stocks, bonds, derivatives, venture capital, real estate, etc.)
• Portfolio Management and Analysis (asset allocation, portfolio risk, performance measurement, etc.)

Study materials for the CFA Exams are available from numerous learning providers (http://www.cfainstitute.org/cfaprog/resources/guidelinesparticipants.html) including Elan Guides (www.elanguides.com), Kaplan Schweser (www.schweser.com), and Stalla Review (www.stalla.com).

ETHICS
The ethics section is primarily concerned with compliance and reporting rules when managing an investor's money or when issuing research reports. Some rules pertain more generally to professional behavior (such as prohibitions against plagiarism); others specifically relate to the proper use of the designation for charterholders and candidates. All of these rules are delineated in the 'Code and Standards'.

Quantitative analysis
The curriculum is dominated by statistics; other topics such as the time value of money are also addressed. The topics are fairly broad, covering standard topics such as hypothesis testing, regression analysis and time series analysis, as well as portfolio related topics. (Some quantitative topics are covered in other sections, for example, calculating depreciation of assets is a part of financial statement analysis (accounting), and determining currency arbitrage is a part of international economics.)

Economics
Both micro- and macroeconomics are covered, including international economics (mainly related to currency conversions and how they are affected by international interest rates and inflation). By Level III, the focus is on applying economic analysis to portfolio management and asset allocation.

Accounting
Accounting is heavily tested at Levels I and II, but is not a significant part of Level III. The Curriculum includes financial statement analysis and corporate finance.

Security analysis
The curriculum includes coverage of global markets, as well as analysis of the various asset types: equity (stocks), fixed income (bonds), derivatives (futures, forwards, options and swaps), and alternative investments (Real Estate, Private Equity, Hedge Funds and Commodities). The first levels of the test require familiarity with these instruments; the focus of Level II is valuation; Level III studies incorporation of these instruments into portfolios.

Portfolio management
This section increases in importance with each of the three levels - it integrates and draws from the other topics, including ethics. It includes Modern portfolio theory (efficient frontier, Capital asset pricing model, etc); investment practice (defining the investment policy, resultant asset allocation, order execution); and measurement of investment performance.

THE CODE OF ETHICS
Members of CFA Institute (including charterholders and candidates for the CFA designation) must:
• Act with integrity, competence, diligence, respect, and in an ethical manner with the public, clients, prospective clients, employers, employees, colleagues in the investment profession, and other participants in the global capital markets.
• Place the integrity of the investment profession and the interests of clients above their own personal interests.
• Use reasonable care and exercise independent professional judgment when conducting investment analysis, making investment recommendations, taking investment actions, and engaging in other professional activities.
• Practice and encourage others to practice in a professional and ethical manner that will reflect credit on ourselves and the profession.
• Promote the integrity of, and uphold the rules governing, capital markets.
• Maintain and improve their professional competence and strive to maintain and improve the competence of other investment professionals

TishTrek's Candidate Assessment of John Chambers: He is a Columbia University scholar & graduate with CFA Certification who has a long standing history as a key decision-maker and leader in Financial Services. Mr. Chambers is a high caliber talent who is looking at the nation's credit challenges through the window and paradym of all the challenges he has succeeded and/or failied at during his career.

He lives the kind of leader behaviors that matter most in work and life, which has been a topic of THE JOB BLOG many times. Mr. Chambers operates with business intergrity, high standards, values and ethics. He possesses the 'management courage' and the guts to do what's right even when his conclusion or solution is wholly unpopular. The fact that his commitment to objectivity - enhanced through teamwork and collaboration - can't be interrupted for personal profit or swayed by external henchmen means his actions can be trusted.

If there had been more leaders like Mr. Chambers in the trenches of Banking and Wall Street from 2000 to 2011, the mortgage/subprime/CDO plot that destroyed our economy and jobs could never have played out. I know this to be the case because many of my employment candidates got caught in the terrible cross-fire of dishonest actions focused only on short-term stints for personal profit.

When executives fail to live the tenets of leader behaviors, bailouts for the brands they willingly destroyed have to end.

Hope this is helpful. - TishTrek