History of Wall Street

In response to the historic stock price mention in the last post, I received a link to this History of Wall StreetBTW a bit of trivia: Most of you know that the NYSE was basically started with the Buttonwood Agreement. What type of tree is a buttonwood?Yes, the Sycamore. The nickname was earned because of the seeds that look like buttons.A few linksOhio State Forestry, TreeTotem (which suggests

Old stock data from Will Goetzmann's Home Page

I am trying to review a stock split paper (I strated it yesterday and never finished) and SSRN was down, so I figured I would Google it. And what a treat! Will Goetzmann has links to many sources of old (as in from the 1800s!) stock data as well as his own papers and many other cool sites.

Will Goetzmann's Home Page
Will Goetzmann's Home Page

I already have a paper in mind. If anyone is

Trading Halts: new evidence from Istanbul

Bildik gives us a interesting look at trading halts. While the data and the halts he looks at are from the from the Istanbul stock market, most of what he writes is similar worldwide.Trading halt papers are always interesting and often controversial. This controversy comes in part from the underlying controversies surrounding the halts themselves."The stated purpose of trading halts is to allow

The New York Times Deal Book

The New York Times > Member Center > Deal Book

The NY Times Deal Book is by far my favorite business news newsletter. It is so great. It gives a look at all of the major stories and links to them. For instance, among the many stories in today's newsletter were stories on:

The Deal.com gives us an update on the Japanese banking sector:
"
I"t has taken Japan nearly 15 years to restructure the

Is growth good for shareholders?

I love articles that turn the conventional wisdom on its head (and I held this view long prior to ristening to Freakonomics), but that said, this one surprised me. What is more, in doing looking at growth and returns, Ritter offers valuable insights into what matters in forecasting expected returns.Jay Ritter finds that shareholder returns are negatively correlated with economic growth.In his

Governance and CEO Turnover: Do Something or Do the Right Thing? by Raymond Fisman, Rakesh Khurana, Matthew Rhodes-Kropf

SSRN-Governance and CEO Turnover: Do Something or Do the Right Thing? by Raymond Fisman, Rakesh Khurana, Matthew Rhodes-KropfConventional wisdom suggests that replacing a manager if the stock price is falling is good. Along the same lines we often view (and teach) that managerial entrenchment is bad. However, maybe that is too simplistic of view. Entrenchment can play a positive role in reducing

Thomas Friedman and Energy Independence

To those of you who have read, or are reading/ristening to The World is Flat, you will be very interested in this. It is an interview with Thomas Friedman. While it is largely a gloom and doom piece about the need for an energy program (possibly with good reason), there are some interesting tidbits.For instance: he calls for the creation of an "energy Axis" between the West, India, and China to

SSRN-Reconciling Efficient Markets with Behavioral Finance: The Adaptive Markets Hypothesis by Andrew Lo

I will write more about this one later. But I just found it and it is a definite keeper!

SSRN-Reconciling Efficient Markets with Behavioral Finance: The Adaptive Markets Hypothesis by Andrew Lo

Super short version from abstract:

"The battle between proponents of the Efficient Markets Hypothesis and champions of behavioral finance has never been more pitched, and there is little consensus as

Investments and Life Insurance are not independent decisions

SSRN-Human Capital, Asset Allocation, and Life Insurance by Roger Ibbotson, Peng Chen, Moshe Milevsky, Xingnong Zhu: "Human Capital, Asset Allocation, and Life Insurance"Executive Summary (Don't you think that sounds better than abstract?)You should look at life insurance as another asset in your portfolio.Ibbotson, Chen, Milevsky, and Zhu tell us that we can not make investment and life

Conflicts of Interest, Regulations, and Stock Recommendations by Leonardo Madureira

Does regulation change behavior? That is the question that Madureira asks. To examine this question Madureira examines whether regulations on sell-side research recommendations changed following the "increased scrutiny of their equity research business regarding conflicts of interest driven by investment bank relationships."And the answer? Yes. Behavior (at least in the short run has changed.)

Publishing Advice from the Marginal Revolution

As Paul Harvey would say: "This is closed circuit for the academics"The Marginal Revolution blog has some good advice on how to get articles published. And yes reading the list may smart a bit.Ouch! But I guess that is the intent of any spur. FTR: I am not endorsing all of these views, but do appreciate them none-the-less.As an aside, the Marginal Revolution also had an intriguing look at grade

Reputation matters-a lot!

In light of the recent Tyco trial and this week's sentencing of the Rigases, it might behoove us to remember that the market, and not the SEC or the courts, is the real disciplinarian. The market penalty (as measured by the drop in value of the firm) is much greater than the out of pocket fine imposed by the legal and regulatory system.Until recently we have only had antectodal evidence of this (

Ten Money Blogs Everyone Should Read from Yahoo! Finance Special Edition

Yeah, I am really biased on this. A #6? will have to work on that ;)

Yahoo! Finance Special Edition: Welcome to the Blogosphere

Another charity opportunity!

Just what you wanted! Another chance to give money to a great charity.

I have decided to ride in Roswell Park 100K this weekend. THe money goes to help fight cancer.

So if you want to give, click through the below link. THANKS!
Roswell Park Alliance Foundation:

The Risk Return Tradeoff in the Long-Run: 1836-2003 by Christian Lundblad

SSRN-The Risk Return Tradeoff in the Long-Run: 1836-2003 by Christian LundbladLundblad looks at US stock data from 1836 and finds sure enough that risk and return are related. SHOCK!Key quote:"I obtain a positive and significant relationship between the expected market return and conditional market volatility regardless of how the model is specified."Whew. Risk and return are related. Not that I

SSRN-All that Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors by Brad Barber, Terrance Ode

Ladies and gentlemen, we have now have more proof of what you may have long suspected: that investors do buy stocks that are in the news at a greater rate than other stocks.If you remember, this idea was mentioned back when we were talking about the NCAA basketball tournement. It ws suggested that trying to pick winners (rather than going with the favorite) was in part because of the glamour of

Future of Archipelago boss hangs on judge's ruling

Who is going to head thecombined NYSE-Acheipelago? Well officially it appears that there will be co-presidents, but that may change depending on a court ruling:

Future of Archipelago boss hangs on judge's ruling: "Putnam, chief executive of Archipelago, stands to become a co-president of the NYSE if the deal closes. But he also stands accused of cheating a former business partner out of a stake

Adelphia founder sentenced to 15 years - Yahoo! News

Adelphia founder sentenced to 15 years - Yahoo! News: "John Rigas, founder of cable operator Adelphia Communications Corp. (Other OTC:ADELQ - news), was sentenced on Monday to a lower-than-expected 15 years in federal prison for concealing loans and stealing millions from the company.
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The sentence for his son, Timothy Rigas, is expected later on Monday"

While it may be "

A Consumption-Based Explanation of Expected Returns

Research-Finance.com (one of my favorite sites!) pointed out this gem that links stock returns and consumption. It is forthcoming in the Journal of Finance.Yogo: A Consumption-Based Explanation of Expected ReturnsIn the author's words:"This paper proposes a simple consumption-based explanation of both the cross-sectional variation in expected stock returns and the countercyclical variation in the

A look around at a few blogs

I have not done one of these look around pieces in a while, so why not? Freakonomics has an update on the discussion from the book on real estate agents. If you have not read/ristened to the book, in the book Levitt points out a study that finds that real estate agents behave differently when selling their own homes than when they are selling homes for clients. SHOCK! It now seems that the

BBC NEWS | Business | Tyco two guilty of stealing $150m

CEO fraud may decrease somewhat after this verdict!

BBC NEWS | Business | Tyco two guilty of stealing $150m

"Former Tyco chief executive Dennis Kozlowski and finance chief Mark Swartz have been found guilty of stealing over $150m (£82m) from the US manufacturer.

They used the cash to fund opulent lifestyles, splashing out on expensive jewellery, luxury apartments and giant $2m Mediterranean

SSRN-Irrational Diversification: An Experimental Examination of the Diversification Heuristic by Thierry Post, Guido Baltussen

While I am not always a fan of experimental economics (or finance in this case), this one is interesting and it gets to whether people diversify rationally or not.SSRN-Irrational Diversification: An Experimental Examination of the Diversification Heuristic by Thierry Post, Guido BaltussenShort version: people do an OK job, but not optimal and how the diversification topic is framed, influences

SSRN-Systemic Risk and Hedge Funds by Nicholas Tung Chan, Mila Getmansky, Shane Haas, Andrew Lo

Continuing the discussion on Hedge Funds and their regulation, Chan, Getmanksy, Haas, and Lo have some important contributions to make. Their paper Systemic Risk and Hedge Funds by Nicholas Tung Chan, Mila Getmansky, Shane Haas, Andrew Lo (which is being presented at the 2005 EFA conference paints a picture of banks being exposed to the hedge fund industry and the hedge fund industry being quite

To regulate or not? A look at Hedge funds

The decision to regulate or not regulate hedge funds is a tough one. On one hand is the view that more regulation is needed since the funds have grown so large and often take large risks. The big fear in this camp that a "blow-up" could lead to major market declines. (Sort of the LTCM scenario).On the other hand is the view that by their very nature hedge funds are difficult to regulate and

The future of text books?

Megginson and Smart Introdcution to Corporate Finance--Companion Site Wow. I think we may have a glimpse into the future of text books with this one. It is the new Introduction to Corporate Finance by William Megginson and Scott Smart.From videos for most topics, to interviews, to powerpoint, to a student study guide, to excel help...just a total integration of a text and a web site! Well done!At

SSRN-Research Roundtable Discussion: The Diversification Discount by Belen Villalonga

I finished up a paper today so it is time to start a new one. In doing preliminary research for the new paper, I stumbled upon this roundtable on the Diversification Discount. It is excellent! Very interesting. And yes it is two years old, but still well worth your time!

SSRN-Research Roundtable Discussion: The Diversification Discount by Belen Villalonga: " Villalonga, Belen, 'Research

Brad DeLong's Website: An Historical Document: Long-Term Capital Management CEO John Meriwether Asks for Money

If this is real, it will definitely be discussed in class. However, I am not sure if it is. A letter from John Meriwether during the collapse of LTCM.Brad DeLong's Website: An Historical Document: Long-Term Capital Management CEO John Meriwether Asks for MoneyThanks to MoneyScience and Brad Delong for pointing it out.

Public offer vs private placement

Have you ever wondered why some firms issue convertible debt privately whereas other firms choose to issue their debt publicly? Well wonder no more! Devrim Yaman has answered at least the majority of our questions in her Bquest article. Information story explains public vs private choice

and the answer? Where information asymmetry problems are great, firms choose private placements. Which is

Monkeys, risk aversion, game theory, inflation, and more

Steven Levitt on monkeys and investors:

Monkey Business - New York Times: "...economics is increasingly being recognized as a science whose statistical tools can be put to work on nearly any aspect of modern life. That's because economics is in essence the study of incentives, and how people -- perhaps even monkeys -- respond to those incentives. A quick scan of the current literature reveals

Roger Lowenstein on hedge funds

Seeking Alpha and MoneyScience.org point out a great article on Hedge Funds by Roger Lowenstein (yes, the author of When Genius Fails etc).
Very interesting....I would comment on it, but seeking Alpha already has so I will link to those comments:
Seeking Alpha: Roger Lowenstein on hedge funds

a quick quote:
"It's a good time to be a financial-disaster writer. Disasters abound, and even when

A list of finance blogs

I was recently asked what blogs I try to follow. So I decided to make a list of the finance/economics blogs I have in my readers.
List of Blogs Enjoy!

George Mikan and Executive Compensation

George Mikan the NBA Hall of Fame Center died this week. Absolute all reports of the man that I have read say he was nothing but a great guy.

For instance: Yahoo! Sports - NBA - Shaq offers to pay for Mikan's funeral: "Mikan died Wednesday night at a rehabilitation center in Scottsdale, Ariz., following a long fight with diabetes and kidney ailments. He was 80....`He was a great man. We had

A look at the Andersen Verdict

First the news announcement: From the NY Times:"WASHINGTON, May 31 - With a brief, pointed and unanimous opinion, the Supreme Court on Tuesday overturned Arthur Andersen's conviction for shredding Enron accounting documents as that company was collapsing in one of the nation's biggest corporate scandals."From The BBC:"Chief Justice William H Rehnquist said the instructions were too vague for the