Monday, February 21, 2011

The stock market hates dirty air - The Boston Globe

The stock market hates dirty air - The Boston Globe:
"Analyzing daily index returns from several stock exchanges over a 10-year period, the authors of the study found that stock returns were generally lower on days with poor air quality ratings in the vicinity of the stock exchange. The effect is significant: Trading stocks based on day-to-day air quality ratings might have allowed you to beat the annual return on the S&P 500 by several percentage points."
if you are looking for the paper it is here from ScienceDriect.

Similar findings to this paper from last year's paper that found the same type thing in Milan. But I cannot find it. Will try to look after the pool. :)

Sunday, February 20, 2011

Are stock prices determined by facts or human nature? -

Are stock prices determined by facts or human nature? -
"Wall Street has long liked to portray the markets as fiercely efficient, an instantaneous and dispassionate mechanism for valuing companies....But the past decade has taught us that markets can be anything but rational. So today, behaviorists rule: They tell you that investors hold losing stocks not so much because they're undervalued but because it's hard to admit defeat. They note that men tend to trade more aggressively than women....And most people buy stocks because they're going up — not because of earnings prospects.

Which is right? Both camps have good points."

The article goes on to lay out research supporting both sides. A must read for my classes! :)

Saturday, February 19, 2011

Markowitz' views on Modern Portfolio Theory in his own words

Mandatory for class, recommended for all!

For 89 cents this might be useful too.

More on multi-factor models

Here is an interviews Gene Fama Jr. discussing multifactor asset pricing models. As mentioned in class, the basic idea is the same as CAPM, but the measures of systematic risk are better and the models capture risk better.

Wednesday, February 16, 2011

Class videos

I have always been told I have the face for radio, but that said, here are some videos that will likely help review for the next exam:

Model of Financial System:

The Role of Financial Intermediaries:

Where various classes fit:

Nexus of Contracts:

Introductory Bond Pricing

Introduction to Valuation

Bond prices and interest rate changes:

Introduction to capital budgeting

Monday, February 14, 2011

Mets and Madoff on Outside the Lines - ESPN

Outside the Lines - ESPN:
"A lawsuit against Fred Wilpon and his associates claims the Mets owners reaped $300 million in profits through Bernard Madoff's Ponzi scheme. Seeking an infusion of cash to deal with the lawsuit, the Mets announced that a 25 percent stake in the team is for sale. 'Outside the Lines'' T.J. Quinn reports there are now serious doubts about whether the Mets owners can remain in charge. "
H/T to MetsBlog!

Accounting scandals - Wikipedia, the free encyclopedia

Last night a group of us were talking about various accounting scandals. In some ways remarkable at how few remembered some of them. Thus when I saw this (via MoneyScience) today , it was perfect timing.

Accounting scandals - Wikipedia, the free encyclopedia:
"Accounting scandals, or corporate accounting scandals, are political and business scandals which arise with the disclosure of misdeeds by trusted executives of large public corporations. Such misdeeds typically involve complex methods for misusing or misdirecting funds, overstating revenues, understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities, sometimes with the cooperation of officials in other corporations or affiliates.

In public companies, this type of 'creative accounting' can amount to fraud and investigations are typically launched by government oversight agencies, such as the Securities and Exchange Commission (SEC) in the United States.

Scandals are often only the 'tip of the iceberg'. They represent the visible catastrophic failures. Note that much abuse can be completely legal or quasi legal."

The article goes on to have a list with links to many of their stories.
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Thursday, February 10, 2011

Four features in appreciation of the life and work of Benoit Mandelbrot | Finance Focus | News & Blogs | MoneyScience

Four features in appreciation of the life and work of Benoit Mandelbrot | Finance Focus | News & Blogs | MoneyScience:

"... after the sad death of Professor Mandelbrot last year, I thought it would be a great idea to pull together some short articles in his memory. The journal have very kindly made those articles freely available...."

Great stuff from MoneyScience and the Journal of Quantitative Finance. Seriously must read stuff! :)

Sorry this is a bit late, I have been approximately flat out with school, BonaResponds, a Dean search, a econ/finance professor search, and normal life stuff. I just got around to reading this tonight. Well worth your time!

Wednesday, February 09, 2011

Columbia Ideas at Work : Feature : Emotional+Accounting

Columbia Ideas at Work : Feature : Emotional+Accounting:
"Levav and his coresearcher conducted several studies that tested how university students spent money they received under different circumstances. In one experiment, students who completed a market research survey were given a choice afterward of different $2 coupons. They could spend the coupons either on ice cream in the cafeteria or on books in the university bookstore. Half of the students were told that the grant for the coupons came from the computer firm Dell, which had positive or neutral associations within the student population. The other half were told the grant came from the tobacco company Philip Morris. About 44 percent of the students who were told the coupons were paid for by Philip Morris chose the utilitarian textbook coupons, double the percentage of those who were told the coupons came from Dell.

“In essence, people tell themselves, ‘Let me do something good with the money so I don’t feel bad about it anymore,” Levav says.
It would be interesting to see if those who commit fraud give away a disproportionate amount of their "income".

Thanks to SimoleonSense

Equity Valuation via a movie about my class

Equity Valuation from my classes.

Monday, February 07, 2011

BBC News - AOL to buy Huffington Post in $315m media merger

I know I have said it before, but sometimes I forget AOL is still in business. Maybe this will change it?

BBC News - AOL to buy Huffington Post in $315m media merger:
"'The combination of AOL's infrastructure and scale with the Huffington Post's pioneering approach to news and innovative community-building among a broad and sophisticated audience will mark a seminal moment in the evolution of digital journalism and online engagement,' said the two companies in their statement."

Friday, February 04, 2011

Madoff Victim Says Mets Owners Ignored Alarms -

Madoff Victim Says Mets Owners Ignored Alarms -
"The trustee for the victims of Bernard L. Madoff’s Ponzi scheme, Irving H. Picard, has sued the owners, seeking hundreds of millions of dollars — in part, Picard contends, because the owners either knew or should have known that Madoff’s investment operation was a potential fraud."