HALF A CENTURY AGO, OLD STOCKBROKERS USED TO pass themselves off as wise investors to new recruits by saying that “in the market, perceptions are the only reality.” In that era, the presidents of public companies were men who had worked obscurely in businesses, ascending their respective corporate ladders for over 30 years before finding themselves facing strange people from the financial world for the first time in their last decade before retirement. They would often remark that, although they were “interested” in the comments of people from the stock market, “no one could ever run a business based on what people in the stock market were saying.” A theme that runs through several of the articles in this issue of The Analyst is the difference between stock market perceptions and business realities and how mixing them up can lead to serious problems for investors and for the economy. One article asks the question “Is Management’s Pursuit of Shareholder Value Doing More Harm than Good?” while two others analyze the behavioural and cognitive biases that cause our perceptions to diverge widely from reality. As you read the latter two articles, bear in mind that it is when we are cognitively most certain about our perceptions that we are likely to be the most cognitively biased!

Also featured in this issue is an article on what the Government of Canada has called “a major breakthrough for the pension market”—the new Pooled Registered Pension Plans (PRPPs) that represent a clarion call for fiduciary responsibility in the investment profession. It’s a call that CFAs are particularly well positioned to answer. We also have an article on CFA Society Toronto’s Annual Interest Rate Forecast Luncheon, which once again provided food for thought while it revisited the outlook for the single most important variable in financial markets.

In recognition of the important role that technology now plays in the investment industry, we have articles on the effective use and leveraging of social media and on ways to address the growing risks from IT conflicts and failures. News about society members and our joint rebranding initiative with CFA Institute, an article on academic research into investment markets, results of online polls, a snapshot of investment markets in China, and book reviews relevant to the topics discussed in the current issue round out our contents this quarter.

We hope that the increased scope and size of this issue of The Analyst proves pleasing, and as always, we encourage and warmly welcome your comments and contributions.