Hands On USA : Thanksgiving video

Oops, this was supposed to go on My Randomtopics2 blog, sorry!!!A Thanksgiving video is up. VERY good!!!So many familiar faces!But since I have you attention, why not consider coming down with us when we go back? Check out our plans here. It will be a GREAT trip!

Most corporate fraud found by luck: study - Yahoo! News

Most corporate fraud found by luck: study - Yahoo! News: "Despite tough regulations aimed at improving corporate governance, financial fraud is still on the rise around the world, and most is still detected by chance, a study from auditing firm PriceWaterhouseCoopers (PWC) showed on Tuesday""For the roughly one-third which said they could quantify the cost of the fraud, the total losses exceeded

Is Stock Picking Declining Around the World? by Utpal Bhattacharya, Neal Galpin

SSRN-Is Stock Picking Declining Around the World? by Utpal Bhattacharya, Neal Galpin:Short version: Bhattacharya and Galpin examine the relative use of indexing vs. stock picking in various equity markets around the world. They find that indexing is increasing pretty much everywhere but especially in more developed markets. They also estimate that the "long run steady state" fraction of stock

Please, Sir, I Want Some More - How Goldman Sachs is Carving Up its $11 Billion Money Pie

New York Magazine has an interesting look at Wall Street bonuses.

Please, Sir, I Want Some More - How Goldman Sachs is Carving Up its $11 Billion Money Pie: "The standard portion of net revenue (total revenue minus interest expense) earmarked for compensation at Wall Street firms stands at an astonishing 50 percent. That?s because talent is the most precious commodity on Wall Street; it?s what

New Email Service

Once again you guys have come to the rescue!I mentioned that many people had requested an emailed newsletter since they could not access blogspot from work. Jeff from MBA Depot suggested Feedblitz. It is great. It allows you sign up and receive emails of the most recent blog entries.In their words:"It's easy too! No gurus required. The basic service is free to all - no restrictions, no ads.

moneyscience.org : SmartMoney Interview: Nassim Taleb

If you have never read Fooled by Randomness, you owe yourself a present for the Holidays. Money.science found an interview with the aurthor Nassim Taleb. Good stuff.

Short version of the book: many traders are just lucky and they take way too many chances because they think they are good.

moneyscience.org : SmartMoney Interview: Nassim Taleb: "Good call TaylorTree for spotting this interview

Writely - The Web Word Processor

Eric Briys did it again! The person who turned me onto blogging and the person behind Cyberlibris and the cyberlibris blog sent me a note today mentioning Writely.com.I checked it out and wow! It is so cool. It is an online word processor that multiple people can use at the same time. It will be perfect for co-authoring papers etc. Indeed, you can pretty much make it a "wiki" world.I have

Update on things

Sorry I have been such a spotty poster of late. Between travel, tests, my own research, and other things (including a dog that got into macadamian nuts--a definite no-no!), I have not had much time.just some quick updates on various topics:1. Due to several requests (especially on the NYC trip) I will somehow be bringing back the newsletter yet again. It is such a pain to do, but there does seem

Gone for a few days

I am off to the Southern Finance Association meetings. I will be back on Friday. (yeah short trip). Depending on how much time is available and connection speed, I will try to give updates from the conference. But no guarantees.

Nasdaq to allow 1,2,3 letter symbols

Well, you can keep your phone number when you change carriers, so why not your ticker if you change markets?Latest News and Financial Information | Reuters.com: "From Jan. 31, 2007 it will be able to support one-, two- and three-character stock symbols for Nasdaq-listed and NYSE-listed stocks, in addition to the four-character symbols it currently uses.The single-character stock symbol carries a

Capital structure lesson

It worked!

Want to hear a class? Here is my finance 401 class lecture on capital structure. Some studnets actually asked me to put them online :)

This is a senior level course.

Take a listen ;)

At the request of the authors

The post on abnormal returns accruing to elected officials was removed at the request of the authors.

Voting and Rationality

In much of the US today is Election day, so I will devote some time to politics and how it can be used to demonstrate finance (and economic) topics. In the first of two blog entries dealing with politics, we will begin off with a seemingly simple question: Why vote? It is a question that has pained economists for years. Why? The odds are very very high that you will not be the marginal

How 1+1+1+1 Can Equal Less Than 4 - New York Times

This was in yesterday's NY Times. It is another supporting article for the diversification discount.How 1 1 1 1 Can Equal Less Than 4 - New York Times: "over the long haul, conglomerates, on average, perform worse in the stock market than the typical focused company. One likely cause is that they tend to do a poor job of allocating capital among their various divisions. Of course, if

International Calendar Effects

"December and January Effects around the Globe: Evidence from US and International Panel Data"Salimi, Wang, Yakovlev, and Roychoudhury provide further evidence that the January and December effects. The authors describe these effects as:"When investors do not sell winner stocks in December but postpone their sale to January so that capital gains will not be realized in the current fiscal year,

Why indexing is less controversial now

Joanthan Clements has long been one of my favorite WSJ writers and once again he nails it! In his most recent article (Nov. 6, 2005) he suggests that the reason indexing has finally caught on is because brokers and advisors no longer have as much of an incentive to fight it.WSJ.com - Getting Going: "Yet the widespread acceptance of indexing has come only in the past few years. Indeed, as recently

CFOs tell us what they think of SOX

Survery of CFOs on SOXI will start this one with my standard discalaimer whenever I review a paper that is based on a survey data: be forewarned, survey data is often notoroiously inaccurate and biased. Thus, view the folloiwng with a good deal of skepticism.The warning given, the paper itself is intersting. Peng, Dukes, and Bremer survey 1,312 CFOs who were in the Financial Executives

Who is Jay Cooke?

Looking for an unsung hero of the US Civil War? You could do much worse than picking Jay Cooke. Jay Cooke was what we would now call an investment banker.. He had made quite the name for himself selling all types of securities but especially state bonds---his Pennsylvania and Texas bond sales are particularly interesting and could be the focus of a future entry just by themselves

FRB: Speech, Ferguson--Monetary Credibility, Inflation, and Economic Growth--November 3, 2005

Very useful for a money and Banking class!FRB: Speech, Ferguson--Monetary Credibility, Inflation, and Economic Growth--November 3, 2005: "By now it must be universally agreed that low and stable inflation is a primary and essential goal for monetary policy, in large part because we believe it brings stability to financial systems and fosters sustainable economic growth over the longer run. In

Leverage and Investment

Leverage and OVER investment--Yet another "ARGHHHH--why didn't I think of that!" paperShowing that leverage leads to underinvestment is standard fare for any corporate finance class. Indeed, I had planned on doing it today. However, as Lyandres and Zhdanov point out, it might be better to say that leverage influences investment, but that the direction of the bias is firm-dependent (which once

Higher moments and finance

Incorporating Higher Moments into Financial Data Analysis--James M. SfiridisOh boy, here we go! Hold on tight and let's tag along for the ride. This could change some things!Virtually everything we do with respect to risk and return centers on the assumption of normality (that is that the normal distribution correclt explains returns, or minimally the log of returns).The problem is nearly

Delaware Incorporation and Bonds

"Does Delaware Incorporation Affect Bondholder Wealth?"by Francis, Hasan, John, and Waisman.First the answer: Yes.Bonds rarely spark the interest of stocks, but this one is sort of cool. Francis, Hasan, John, and Waisman examine the interest rates spreads of corporate issues based on where companies are incorporated. They find that firms that are incorporated in Delaware pay a penalty (in the