1. Kylie Minogue Asset Models & Who cares anyway
Martyn Dorey
Consultant
Frequently, presenters must deliver material of a technical nature to an audience unfamiliar with the topic or vocabulary. The material may be complex or heavy with detail. To present technical material effectively, use the following guidelines from Dale Carnegie Training®.
Consider the amount of time available and prepare to organize your material. Narrow your topic. Divide your presentation into clear segments. Follow a logical progression. Maintain your focus throughout. Close the presentation with a summary, repetition of the key steps, or a logical conclusion.
Keep your audience in mind at all times. For example, be sure data is clear and information is relevant. Keep the level of detail and vocabulary appropriate for the audience. Use visuals to support key points or steps. Keep alert to the needs of your listeners, and you will have a more receptive audience.
2 December 2003
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2. Objectives Split presentation into three parts Epistemology Technical
Influence of internal culture on modelling
Reflections on debate earlier
Technical
Pay attention here comes the science bit
Behavioural aspects of optimisation
How do you put a price on the downside
Do we care?
What are the big issues we need to be thinking about over the year
Plan for next year
If you have several points, steps, or key ideas use multiple slides. Determine if your audience is to understand a new idea, learn a process, or receive greater depth to a familiar concept. Back up each point with adequate explanation. As appropriate, supplement your presentation with technical support data in hard copy or on disc, , or the Internet. Develop each point adequately to communicate with your audience.

3. Step back in time Whats the Kylie link?
This is an accessible conference
Fancied doing something different from neighbours & went into competitive pop business
Early success was short lived
Culture changed
Found herself out of a job
What was wrong?
If you have several points, steps, or key ideas use multiple slides. Determine if your audience is to understand a new idea, learn a process, or receive greater depth to a familiar concept. Back up each point with adequate explanation. As appropriate, supplement your presentation with technical support data in hard copy or on disc, , or the Internet. Develop each point adequately to communicate with your audience.

4. Wouldn’t change a thing -
Kylie ultimate consultant:
Reinvent approach every decade using latest technology
Responded to changing cultural environment
Measurable feedback on approach
Did not specialise but got better at everything
Anything goes
Above all took risk
Got involved in the creative process

5. Kylie Vs. actuarial risk modelling
Creative thinking?
Is culture is stagnant
Press - do we take it too seriously?
Competitive approach in press and talks
Competitors in the top 40
Breadth and depth of product philosophies/styles
Similar models used
4 advisors 65% of FTSE 100
Change of direction interpreted
weakness not creative strength
Bitchy?
Use competitors good ideas
Finish other peoples ideas
Integrated vs. segregated
Get involved in creative process
Seek contemporary creativity
Trying to be ‘hard’
You can still be normal

6. Getting ideas out. 100% funded Express risk as Potential funding level
Potential contribution rate rises
Analysis examines different outcomes based on a simple bell curve
Most people concerned with poor experience
Also consider better than expected
100% funded
Average in the middle
Better than average experience
If you have several points, steps, or key ideas use multiple slides. Determine if your audience is to understand a new idea, learn a process, or receive greater depth to a familiar concept. Back up each point with adequate explanation. As appropriate, supplement your presentation with technical support data in hard copy or on disc, , or the Internet. Develop each point adequately to communicate with your audience.
Poor experience
Gray area =33%
Gray area = 90%
1/3 of time Y funded or better
90% of time X funded or better

7. Mini case study (1) Client likes bonds
With very little information from actuary basis for discussion
If you have several points, steps, or key ideas use multiple slides. Determine if your audience is to understand a new idea, learn a process, or receive greater depth to a familiar concept. Back up each point with adequate explanation. As appropriate, supplement your presentation with technical support data in hard copy or on disc, , or the Internet. Develop each point adequately to communicate with your audience.

8. Shocked

9. I should be so lucky

10. Je Ne Sais Pourquoi? 100% Equities MFR low risk FRS17 high risk
100% Bonds
MFR high risk
FRS17 low risk
50:50 lowest risk against all benchmarks

11. Obsession: Behavioural finance
Myopic risk aversion
Hope for out-performance
Need risk to outperform in long term
Too much risk under-perform in short term
Probability of achieving objective
0.1
0.2
0.3
0.4
0.5
0.6
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
Risk against benchmark
Prob where IR = 0.36

12. Obsession: Behavioural finance
Myopic risk aversion
Hope for out-performance
Need risk to outperform in long term
Too much risk under-perform in short term
Probability of achieving objectives
Active risk
Skill
Increasing risk
Increasing skill

13. Obsession: Behavioural finance
Myopic risk aversion
Hope for out-performance
Need risk to outperform in long term
Too much risk under-perform in short term
Probability of achieving objectives
Optimum risk
Skill
Increasing skill

14. manager information ratio
Obsession: Behavioural finance
Probability of achieving objectives
active risk
manager information ratio

15. Word is out: Cost to risk
It’s not ‘hard’
Behavioural method?
If things go wrong how much do you have to pay?
Looks only at downside
Works with any distribution you like – here we will use stochastic
Could be thought of as an option
You will exercise option if your assets don’t deliver the goods

16. Cost to risk: What do I have to do?
Calculate the option:
PV(Min(x-obj),0)
Determine a benchmark
Determine an objective
Calculate distribution around this
Work out the mass function
Then calculate the expected value of downside

17. Output (1)

18. Output (2)

19. Who cares: What is the biggest issue for the younger members Generate
something you would like to hear someone talk about
Something that you would like to talk about
Opportunity to practice
Try out some ideas