The Hedge-Fund 'Clones' - WSJ.com

Hedge fund clones are designed to mimic the return on hedge funds without quite so high of expenses or minimums.The Hedge-Fund 'Clones' - WSJ.com: "...the most common type of hedge-fund cloning, known as the factor model approach, works: Firms analyze a few years' worth of hedge-fund returns, often using data from hedge-fund indexes. The firms then essentially reverse-engineer those returns,

Catching up on some interesting news/posts

Time to clean up my "desktop" a bit...so here are some of the interesting stories that have accumulated there:FT.com / Lex - Investment banks and private banking: "But surely investment banking and private banking are a natural fit? In the world’s fastest growing markets, the development of capital markets and the increase in personal wealth are interlinked. Arranging an initial public offering

Do family firms disclosure more? or less?

Quick--more or less?Answer: less.If you said "less" you are correct. And will enjoy the article knowing you got it right!If you said "more" you are incorrect and will get alot out of the article!Chen, Chen, and Cheng examine"family firms: "...an important organization form, it accounts for approximately 46% of the S&P 1500 firms.1 Family firms are characterized by the founding family’s

Nike Delays Vick's Shoe After NFL Star Is Indicted - WSJ.com

Reputation matters. Good or bad. So it is no surprise that when the horrific charges against Michael Vick have been filed, Nike is now facing tough decisions. Nike Delays Vick's Shoe After NFL Star Is Indicted - WSJ.com: "'Nike is concerned by the serious and highly disturbing allegations made against Michael Vick and we consider any cruelty to animals inhumane and abhorrent,' the company said

Cash and growth? Not a contradiction!

Growing with the Flow - Metrics - CFO.comCFO.com and Georgia Tech's Charles Mulford point out that growing firms often consume much cash and the growth must be financed, it is not always the case. In fact, for many firms cash flows actually increase as the firm grows.A look-in:"Growth is often considered to be a cash drain," says Mulford, director of the lab and professor of accounting at

Interview with Nassim Taleb at Bloomberg

Fooled by Randomness and The Black Swan are each great, thought provoking books. And to top that, Taleb never wears a tie, so he has to be a good guy! But seriously give him a listen. (Thanks to MoneyScience for pointing it out!)MoneyScience Financial Intelligence Network : Podcast: Nassim Taleb at Bloomberg: "Available at the Bloomberg Podcast Page, Nassim Nicholas Taleb, founder of New

How (and why) to invest in commodities

When we speak about diversification we always provide lip service to investing in assets with low correlations, but since most take this to mean different stocks (equities) we sometimes mention other assets but few know how to invest in these other assets such as commodities.Because of that lack of knowledge SmartMoney looks at ways that investors can invest in commodities without having to trade

Economists puzzled by irrational eBay buyers - USATODAY.com

Wow. I have not read the actual study, but if USAToday has it even half correct, this is some solid evidence that people do not always act rationally. I guess the alternative explanation will likely be that the bidder gets more utility (bragging rights?) by winning the auction.Economists puzzled by irrational eBay buyers - USATODAY.com: "Ulrike Malmendier, an economist at the University of

Hedge funds and performance

Given all the attention hedge funds have been getting over the past few years, it is good to be reminded occasionally that when measured against a proper benchmark most hedge funds do NOT outperform. The following is from Ramit Sethi writing at Iwillteachyoutoberich.I Will Teach You To Be Rich » Behind-the-scenes New Yorker article on hedge funds reveals they aren’t so sexy: "...people with

SSRN-Corporate Governance and Firm Value: Endogeneity-Free Evidence from Korea by JungYong Choi, Dong Lee, Kyung Suh Park

Got thinking about class notes for the next semester today. One area where I wanted to firm up a bit was to get some new evidence that governance matters. I guess it was my lucky day since after looking at only 4 papers, I found this interesting piece by Choi, Lee, and Park. They look at the impact of buying by the Korean Governance Fund (a fund who claims to buy firms with poor governance and

David Wright Strikes it Rich with Vitamin Water » Smarter Sports Blog

This really does have finance content! it will make a nice story in class if nothing else...Sure David Wright (and the rest of the Met's power hitters) seem to be mired in a season long funk (maybe Hojo as batting coach can change things?), but do not feel too sorry for David. Seems he made about $20 million in a recent takeover!David Wright Strikes it Rich with Vitamin Water » Smarter Sports

At least a part of the reason

This is not a knock on autoworkers. If they can get paid above market rates, so be it. But when anyone asks why US auto manufacturers are having trouble, the search might begin by looking at some of these stats from over at Autoblog.comU of M Economics professor tackles tough question of UAW wages - Autoblog: "A tip sent us to the blog of Dr. Mark J. Perry, professor of economics and finance at

Predicting equity volatility using Implied Volatilty

Predicting actual volatility using Implied Volatility"In this paper the authors examine460 of the S&P 500 firms to demonstrate that: (1) implied volatility is a better forecaster of realized volatility than historic volatility or GARCH models and (2) the information content of implied volatility significantly decreases with liquidity."Both points are important. The first says that markets are

A Whodunnit in the Hamptons - Ethics - CFO.com

A Whodunnit in the Hamptons - Ethics - CFO.com: "Graham J. Lefford, a former butler to American Idol creator Robert Sillerman, has agreed to a $66,200 settlement in an insider-trading case. The Securities and Exchange Commission had charged Lefford with trading on information he allegedly obtained from faxes sent to Sillerman in 2004, when Sillerman was closing a deal to buy a stake in Elvis

Bigger Bang Better but Dividends better signal?

Bigger Bang - Investor Relations - CFO.com: "When it comes to buying back shares, it pays to think big. Two recent reports — one from Morgan Stanley, the other from Citigroup — find that companies executing the biggest buybacks relative to market capitalisation see their shares rise more than the rest subsequently."Which is interesting enough, but the real reason for inclusion are these two

SSRN-Collateralized Debt Obligations and Credit Risk Transfer by Douglas Lucas, Laurie Goodman, Frank Fabozzi

Talk about a timely article. Lucas, Goodman, and Fabozzi examine collateralized Debt Obligations in this short (and easy to follow) article that looks at how financial institutions can transfer credit risk.SSRN-Collateralized Debt Obligations and Credit Risk Transfer by Douglas Lucas, Laurie Goodman, Frank Fabozzi: "Two recent developments for transferring credit risk are credit derivatives and

FT.com / Companies / Financial services - Moody’s slams private equity

FT.com / Companies / Financial services - Moody’s slams private equity: "Moody’s, the credit rating agency, will on Monday launch an attack on the booming private equity industry, criticising its increasing use of debt to buy companies and questioning its claims that listed companies are better off in private hands.Moody’s voice adds to the growing chorus of US critics, which includes trade

Assets Benchmarked to the S&P 500 Reach $4.91 Trillion; $1.32 Trillion Now Directly Invested: Financial News - Yahoo! Finance

Some interesting stats from Standard and Poor's.Assets Benchmarked to the S&P 500 Reach $4.91 Trillion; $1.32 Trillion Now Directly Invested: Financial News - Yahoo! Finance: "With $4.91 trillion benchmarked to it and $1.32 trillion directly invested, the S&P 500 continues to reign as the world's most followed and influential stock market index. According to Standard & Poor's Annual Survey of

Streets' Alpha Hunters at war with Beta Builders -- that's you - MarketWatch

I have not yet read the book, but I just ordered it (Bernstein's Capital Market's Evolving) thanks to Mark's emailing of the following from CBS:Streets' Alpha Hunters at war with Beta Builders -- that's you - MarketWatch: "Wall Street's high-tech "Alpha Hunters" (benchmark beaters) are in an aggressive psychological war with America's 95 million Main Street investors, the "Beta Builders," average

Heard off the street: When is inside trading not inside trading?

GThe Pittsburgh Post-Gazette looks at the Jagolinzer paper on insider trading that we discussed back in March. Not much of an update, but still interesting:Heard off the street: When is inside trading not inside trading?: "Executives who used 10b5-1 plans beat the market by 6 percent over the subsequent six months while executives who didn't use them beat the market by only 1.9 percent, Mr.

Reading list

I am not sure how it happened, but my book-picking skills have been in top form of late. So since so many liked the last list, here once again I have hit the jackpot with a series of really good books. So without further adieu, here are some of the books I am recommending right now: Finance related:The Black Swan: the Impact of the Highly Improbable by Nassim Nicholas Taleb. Wow. Not