What is I^3?

I^3 papers are those papers that I feel are extra special. The I^3 moniker stands for Interesting, Informative, and Important. You could do much worse than reading them. They really are good. Here are some past winners.

IPO Underpricing, Earnings Quality, and more

Another FMA paper. This one looks at IPO underpricing and Earnings Quality and is by Thomas J. Boulton, Scott B. Smart, Chad J. Zutter.The shortest version is that using international evidence the authors find underpricing is greater where earnings quality (transparency) and liquidity are lower.The abstract says it best: "Examining 7,306 IPOs from 34 countries, we find less underpricing in

The News-Gazette.com:Top salaries continue to rise as UI competes for talent

Well this was sent to me, it is not to as a means of saying so and so gets too much, merely to report that it really is a different world. This is from the University of Illinois. The News-Gazette.com:Top salaries continue to rise as UI competes for talent : "As of fall 2006, the average salary for a full-time professor at the UI was $95,700, up $13,400 or 16 percent since 2002. When comparing

Financial Rounds

I know I mention him all the time, but I actually saw him at FMAs (did not get to speak as he was presenting and I had to leave early for an interview, but the Unknown Professor over at the FinancialRounds has put up some thoughts on the FMA interviews he did as well as his FAQ which even mentions this blog :)

Do Mutual Funds vote responsibly? Evidence from Proxy voting

Another paper from the FMAs:Do Mutual Funds vote Responsibly? Evidence from Proxy Voting by Ng, Wang, and ZaiatsMultiple Choice answer: SometimesShort Answer Answer: Mutual funds frequently vote in a manner that does not appear to be in shareholders' best interest.Essay Answer: How mutual fund managers vote the shares of their fund is a hot topic both because of the growing emphasis on

Do Finance Profs practice what they preach?

Sometimes the most important finding of an article is not played up while lesser items (especially those that appear to more exciting or controversial) are given more play. For instance from SmartMoney:Finance Profs Reveal How They Invest Own Money (The Pro Shop) | SmartMoney.com: "Colby Wright, assistant professor of finance at Central Michigan University and James Doran, finance professor at

The Science Education Myth - Yahoo! News

For those who have read the World is Flat I thought you might be interested in this one even if the jury is still out.The Science Education Myth - Yahoo! News: "The authors of the report, the Urban Institute's Hal Salzman and GeorgetownUniversity professor Lindsay Lowell, show that math, science, and reading testscores at the primary and secondary level have increased over the past twodecades,

FTC Appeals to Court to Undo Whole Foods-Wild Oats Merger - WSJ.com

FTC Appeals to Court to Undo Whole Foods-Wild Oats Merger - WSJ.com: "In an unusual move, the Federal Trade Commission is trying to disrupt the merger of natural-foods grocers Whole Foods Market Inc. and Wild Oats Markets Inc. after the deal has already been consummated. The FTC is asking a Washington appellate court to review a federal-district court ruling in August that allowed the $565

Catching up after FMAs before Finance club trip to NYC

Whew...and I thought I became a teacher in part to avoid business travel. LOL...After spending a week in Ohio with BonaResponds, a trip to Orlando for the FMAs, and now to NYC with the finance club should make me ready to stay home for a while.The FMAs were great. I apologize for not getting more online about them already. I have a notebook full of papers to summarize, just need a few minutes

My favorite presentation of the day-Friday

Hard to say today as I had several interviews and missed more presentations than yesterday (we are hiring--if interested, let me know!). The ones I did get to go to were very good.Probably my favorite was session 148 where Robert Monks and Michael Jensen spoke on corporate governance. Nothing super earth shattering as each said what would be expected if you have read their work, but

WSJ Video on Stock crash of 1987

A twenty year look back

Best paper I saw on Thursday

While many papers I have seen here have been very good, possibly the best was by Agarwal, Boyson, and Naik on Hedged Mutual Funds. It is a really interesting and well done paper that is forthcoming in JFQAA. I will discuss the paper soon (have to run to next session right now), but here is some background on hedged mutual funds.From Investopedia:"Hedged mutual funds, although previously only

Hi from the FMAs

Hi everyone,Just a quick note from the FMAs. I saw many good presentations today. Here is the program (it is slow to load). I will be writing on many of the papers in coming days/weeks.

Free Money Finance: Pennies Add Up to Millions

Free Money Finance has two good articles stressing the importance of small things:Free Money Finance: Pennies Add Up to Millions: "...$5 a day over 40 years and invested at 10% yields almost $1.1 million. Isyour daily Starbucks coffee worth a fully-funded retirement when you can drink acheaper version of the same thing that costs a fraction of the price? This isthe heart of what Bach talks about.

3 Americans Win Nobel in Economics - New York Times

3 Americans Win Nobel in Economics - New York Times: "The field of mechanism design theory strives to take into account the realities of economic life systematically. Adam Smith’s “invisible hand” is a powerful metaphor that describes how the market, in theory, will always efficiently allocate scarce resources. Yet real-world conditions tend to complicate things. Competition is not completely

The Associated Press: Nobel Prizes Look to Economics

The Associated Press: Nobel Prizes Look to Economics: "Speculation on this year's prize has included economists who deal with international trade, macroeconomics and the labor market, among others. Fromlet said Jagdish Bhagwati, a noted proponent of free trade and critic of opponents of globalization, was one of his favorites. 'International trade is probably worth a prize,'"Near the end of the

100 years ago

NPR : Lessons from Wall Street's 'Panic of 1907': "On Oct. 17, 1907, panic began to spread on Wall Street after two men tried to corner the copper market. In the months preceding the panic, the stock market was shaky at best; banks and securities firms were contending with major liquidity problems. By mid-October, Wall Street was paralyzed; for days, there were runs on several large banks.

Lessons from the '87 Crash

Twenty years ago....Lessons from the '87 Crash: "In the five trading sessions from Oct. 13 to Oct. 19, 1987, the Dow Jones industrial average lost a third of its value and about $1 trillion of U.S. stock market value was wiped out. The losses culminated in a panic-stricken 22.6% decline in the Dow on Black Monday, Oct. 19. The traumatic drop raised recession fears and had some preparing for

Kimmunique – EDUCATION FOR THE SELF-DIRECTED INVESTOR

Kimmunique – EDUCATION FOR THE SELF-DIRECTED INVESTOR: "Obsession with performance is a disease inflicting most investors. A principled, rational approach makes more sense, but the medicine is difficult to swallow for most."Well said. Make a plan and within reason try to stick to it!

Finance rises to the top - News

Congratulations to the BC finance department!Finance rises to the top - News: "After years of being close, finance has finally overtaken communication as the most popular area of study at Boston College. This marks the first time in University history that a major outside of the College of Arts and Sciences has held the top spot....the Carroll School of Management's finance concentration boasts