Live From the Super Bowl of Indexing 2011…

The 2011 Super Bowl of Indexing has started on a cool day in Phoenix. It gathers asset managers, academics, financial advisors, stock exchanges and product providers together to dialogue about markets. I am in attendance and will moderate two panels this week — the first centers on emerging markets, “The Rise of China and India.” The other panel will focus on the not so almighty  dollar, “The Weakening U.S. Dollar.” Should be some great discussion around timely topics…

Thus far there seems to be a fair amount of bullishness towards U.S. equity valuations from the likes of Goldman Sachs’ Abbey Joseph Cohen and Vanguard’s Head of Equities, Sandip Bhagat. Vanguard feels the next 10 years will be noticeably better in the equity markets because valuations are considerably lower to start off with. Goldman sees continued volatility in the first part of 2012 with high correlations in asset classes and securities. (a landscape that is tough for active management to add value in) They believe this will give way to a lower correlated market environment with decreased volatility in the second half of 2012. Goldman cited a few risks to the U.S. economy, one being a significant slowdown in Europe as they are one of the largest importers of U.S. goods. Finally Goldman believes the U.S. and the world economy in general will escape a recession.

Perhaps most interesting, is an anti bailout / free market spirit that was present at the conference in several bursts of applause following comments on banks in the U.S. and in Europe receiving publicly funded bailouts. Spoken like a mutually owned investment company, Vanguard commented that “banks should not be allowed to privatize gains and publicly subsidize losses,” which received the loudest applause of the day thus far. Another comment from moderator Cody Willard that also received applause was, “The laws need to be enforced and some bankers need to be sent to prison.” The applause to these comments came from a Wall Street crowd primarily dressed in suits at a conference whose lead sponsor is Goldman Sachs. Interesting times…

More updates, including a recap of the panels I am moderating, to follow.

Here’s a quick snapshot of Corporate Sponsors: