Events

The Danger of Averages, Indexes and the Power of Goodhart’s Law

Academic,
Seminar / Lecture
 
Open to the Public

Event poster

Dear All,

You are cordially invited to attend the upcoming FRE Lecture on Thursday, February 28th at 6PM in LC 400 (4th Floor) - Dibner Building. Dr. Bob Kricheff will present a talk on the following topic:

Title: 

The Danger of Averages, Indexes and the Power of Goodhart’s Law

Abstract: 

Investors seem to be obsessed with using averages and chasing indexes.  Blindly using averages is always dangerous. The rapid ascent of new technologies has raised the risks of using averages when making investments. This is impacting security investors and corporate finance decisions. There are techniques that can be used to better analyze averages and understand the dangers. 

Indexes create new averages. Technology has also led to the proliferation of indexes, to the point where there are now reports that there are more indexes than public stocks.  Computer driven, passive strategies designed to mimic index returns have exploded.  All indexes are flawed in some ways, understanding the flaws and using techniques to more carefully analyze indexes is critical.  The dangers from indexes abound: how are they distorting the markets; is chasing index’s return a reasonable investment goal; and are indexes ripe for manipulation? 

Bio: 

Bob Kricheff joined Shenkman Capital in 2013.  He has 31 years of investment research and strategy experience in leveraged finance. Prior to joining Shenkman Capital, Mr. Kricheff was Managing Director and Head of the Americas High Yield Sector Strategy for Credit Suisse. During his distinguished tenure at Credit Suisse, he oversaw U.S., European and Emerging Market credit research as well as high yield sector and portfolio strategy.  He also worked as a high yield analyst where he covered the media, cable, satellite, telecom, gaming, and entertainment sectors. His work covered bonds, loans and CDS. Additionally, Mr. Kricheff has published two textbooks and two e-books on topics related to leveraged finance and its analysis and has most recently published a book on technology’s impact on investment economics. He has been invited to speak to graduate students at University of London SOAS and Columbia University.  Mr. Kricheff received a BA degree in Economics from New York University and a MS in Financial Economics from the University of London’s School of Oriental and African Studies.

Download the PDF of the slides