SECTIONS
SECTION I

MESSAGE FROM THE RESEARCH

FOUNDATION CHAIR

Theodore R. Aronson, CFA

Chair

CFA Institute  Research Foundation

I take the reins of the CFA Institute Research Foundation at a particularly productive period in its history.
In addition to the numerous publications discussed in these pages, the Research Foundation has produced two award-winning monographs: David Chambers and Elroy Dimson’s Financial Market History: Reflections on the Past for Investors Today (2016) and Ronald N. Kahn’s The Future of Investment Management (2018). (It is fun to note that both volumes reside on my bookshelf next to Roger G. Ibbotson and Rex Sinquefield’s Stocks, Bonds, Bills, and Inflation, another Research Foundation publication from 1977—the year I earned my CFA charter!)
The trustees strive to produce the highest-quality research that is relevant to investment practitioners. Ably led by Bud Haslett, CFA, executive director; Laurence B. Siegel, director of research; and Luis Garcia-Feijóo, CFA, CIPM, assistant director of research, our organization scours the world for topics and authors to provide an important aspect of the CFA Institute mission of education and enlightenment.

After all, research is the lifeblood of what financial analysts do: Fundamental research drives security values, market research makes (some!) sense of market behavior, economic research is driven by macroeconomic forces, and quantitative research marries them all. From Ben Graham’s “intrinsic value” and “margin of safety” to Robert Shiller’s “irrational exuberance,” to Paul Samuelson’s re-introduction of the “random walk” of security prices, to Bill Sharpe’s capital asset pricing model, progress advances as a result of research.

In his 2018 monograph, Kahn forecast that it is a great time for a quantitatively oriented 28-year-old to join our profession. I’m reminded of a wonderful statement by Robert McNamara, former secretary of defense and president of Ford Motor Company. The 1960s were a similar time of major quantitative advances, and McNamara—a quant!—nicely summarized to financial analysts the intersection of the intellectual and the practical—their toolkit of skills: “A computer does not substitute for judgment any more than a pencil substitutes for literacy. But writing without a pencil is no particular advantage.”

The Research Foundation lies at the nexus of all these activities. I am honored to lead a team of volunteer trustees dedicated to our profession. On behalf of those colleagues, thank you for consuming our intellectual output and providing donations to further the cause. Every single penny supports those efforts; thus, it is fair to say that voluntary donations to the CFA Institute Research Foundation pay substantial dividends!

Section I Content:

Message from the Research Foundation Chair
The Year In Review

Multimedia Summaries