Sorry, I was very busy. Rather than wait and post notes on several speakers, I thought it better to post each one as I complete it. As a reminder:

The CFA Institute conducted a conference on value investing in New York on November 29 and 30. The program was excellent. I am posting some of my notes and some of my favorite quotes from the presentations to give you a flavor of the event. This is not a summary of the presentations given during the conference—you had to be there—and my quotes may not be verbatim in all cases. Some were written down several hours after the event, but I think they are true in spirit. The notes reflect the things I heard and saw that resonated with me. Any comments I make are included in parentheses.

James Valentine of AnalystSolutions: Best Practices for Equity Research Analysts

James runs a firm that helps improve the efficiency of investment firms and analysts. He suggests that analysts focus on the tasks that directly and measurably help them generate alpha and push off those that seem urgent but do not help in generating alpha. 

• Don’t play defense; i.e. don’t read every word of every report on a company; there is not enough time in a day to do that and do great research
• Scan all information for the important data. Use third-party bot services that compare changes to financials, for example
• Admits that the above recommendations may put analysts in some uncomfortable situations. He once had a client ask him a question in a meeting about a railroad company’s plan to switch to a new engine. He said he did not know about the railroad’s plan, which made for an uncomfortable meeting. He later explained that the reason he did not know about it was that it would have had no impact on the firm as an investment. It was immaterial trivia that he would not have paid attention to in his analysis of the firm as an investment, but many investors spend hours on trivial details like that and many consider it their competitive advantage to be able to fluently discuss such trivia;
• What is it that makes great research great? “It is a view that is different from the consensus.” 

I am not doing justice to James’s presentation here because he outlines in detail many ways in which an analyst and firm can refocus on what is important. I suggest that you find his presentation and slides on the CFA Institute’s website.

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“It is easier to stand alone, if you know something that others do not or have a unique skill that gives you a leg up on the competition. The hedge fund story is revealing. Note that the herding behavior has increased as the hedge fund business has grown and collective performance has suffered. Much as we like to attribute superior skills to hedge fund managers, the herding behavior suggests that the average hedge fund manager has no competitive edge to speak off and seems to know it.” 

That is, most hedge fund managers are not contrarian value investors but instead are asset gatherers like most in the mutual fund and brokerage industries. Hence they seek to avoid “diverse performance” as Peter Lynch liked to say.

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