Protect your entire portfolio with one trade Lawrence G. McMillan - MarketWatch

We have been trying to get these approved for the Student Managed Portfolio for about three years now.It should be noted (and is below) that the trades are not fail proof and do come with a cost, but have teh benefit of reducing "catastrophic" risk.Protect your entire portfolio with one trade Lawrence G. McMillan - MarketWatch: "There are several ways that an investor can hedge a large portfolio

SSRN-The Pecking Order, Trade-Off, Signaling, and Market-Timing Theories of Capital Structure: A Review by Anton Miglo

It might be summarized as: Finance Professors have a long ways to go before fully understanding capital structure!SSRN-The Pecking Order, Trade-Off, Signaling, and Market-Timing Theories of Capital Structure: A Review by Anton Miglo: "Abstract: This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its

Diversification: Does Your Portfolio Have It? - Yahoo! Finance

Remember that in bad times, correlations go up (and hence the benefits of diversification go down).Diversification: Does Your Portfolio Have It? - Yahoo! Finance: "Even though diversification is a good strategy for most investors, let's clear up a few things about it; diversification won't necessarily protect your investments from declining in value. In other words, diversification is a hedge

SEC Halts Alleged $34M Ponzi Scheme - TIME

SEC Halts Alleged $34M Ponzi Scheme - TIME: "McLeod, who was 48 and lived in Jacksonville, died Tuesday. His body reportedly was found in a Jacksonville park with an apparent self-inflicted gunshot wound. Following his death, it is unclear who, if anyone, is in control of the two firms, the SEC said.The SEC alleged that McLeod lured many of the active and retired federal employees through

Tesla IPO has investors giddy but auto experts wary - Jun. 29, 2010

Update on the TESLA IPOTesla IPO has investors giddy but auto experts wary - Jun. 29, 2010: "Tesla, which will trade on Nasdaq under the symbol 'TSLA,' priced its shares late Monday at $17 each, above the target range of $14 to $16. That allowed Tesla to raise more than $226 million in the IPO."and"PayPal founder Elon Musk's seven-year old auto company lost $55.7 million last year and $260.7

SSRN-Doing Good Deeds in Times of Need: A Strategic Perspective on Corporate Disaster Donations by Alan Muller, Roman Kraeussl

SSRN-Doing Good Deeds in Times of Need: A Strategic Perspective on Corporate Disaster Donations by Alan Muller, Roman KraeusslBasic idea: acting in a socially responsible is more valuable to those firms with bad reputations. Therefore, following a disaster, these are the firms that are more likely to give (since they have the most to gain). From the paper:"We find Hurricane Katrina had a

Will dividend increase be short-lived?

First of all, we should note that dividend yields are still quiet low from a historical perspective (i.e. long term).  That said, they have come back somewhat and are more prevalent now than a decade ago (when even Fama and French were writing on the Demise of the Dividend) and this year we are seeing more firms both initiate as well as increase dividends.

So what happened? Several things. The

SSRN-'Doing Good by Investing Well' - Pension Funds and Socially Responsible Investment: Results of an Expert Survey by Alexander Boersch

SSRN-'Doing Good by Investing Well' - Pension Funds and Socially Responsible Investment: Results of an Expert Survey by Alexander Boersch:
"A survey conducted by Allianz Global Investors and the Centre for European Economic Research (ZEW) among pension experts in France, Germany, Italy, the Netherlands, Switzerland and the United Kingdom on the future of socially responsible investment in pension

A Company’s Debut Hints at an I.P.O. Revival - NYTimes.com

A Company’s Debut Hints at an I.P.O. Revival - NYTimes.com:
"...a decade after its founding, Higher One got its chance on June 17, raising nearly $35 million in an initial public offering on the New York Stock Exchange. The shares made their debut at $12 and closed on Thursday at $14.67, a slight rise from their first-day close.

Many analysts view Higher One’s success as a sign of a long-awaited

Twitter Feels Like Falling in Love, At Least From a Hormonal Perspective

aaTwitter Feels Like Falling in Love, At Least From a Hormonal Perspective:
"As Penenberg tweeted, they measured his hormonal levels with surprising results:

'In those 10 minutes between blood batches one and two, my oxytocin levels spiked 13.2%.... Meanwhile, stress hormones cortisol and ACTH went down'"
I can see this. I would imagine that Tweeting (or Facebook) becomes a sign of acceptance.

Société Générale Trader Remains an Enigma - NYTimes.com

Société Générale Trader Remains an Enigma - NYTimes.com: "The trial of Jérôme Kerviel, accused of setting off nearly €5 billion in losses at the French bank Société Générale, ended Friday with judges and prosecutors conceding that a two-year investigation and three weeks of court hearings had left them no wiser about what had ultimately motivated the former trader to make his enormous,

Debt up $1.7B during Isner-Mahut Wimbledon match - On Politics: Covering the US Congress, Governors, and the 2010 Election - USATODAY.com

Debt up $1.7B during Isner-Mahut Wimbledon match - On Politics: Covering the US Congress, Governors, and the 2010 Election - USATODAY.com: "Shortly after the 11-hour, five-minute match between American John Isner and Nicolas Mahut, of France, Buchanan posted the following to Twitter: 'Think Wimbledon tickets are expensive? Our National Debt has gone up by $1,729,000,000 during the Isner v. Mahut

Upstart Unveils Alternative To Morningstar Fund Rating System

Upstart Unveils Alternative To Morningstar Fund Rating System: "Hedgeable ranks fund managers against their peers in roughly 100 categories. It creates a curve that awards the top 10% of managers in each category with four-and-a-half or five stars, the bottom 10% with one-half or one star, and the middle 80% between one and four stars, depending on where they fall on the curve. Ratings are

Inside the Secret $178 Million Tesla IPO Presentation

Image via WikipediaInside the Secret $178 Million Tesla IPO Presentation:
"After selling just over 1000 cars since 2008 and recording its first — and only — profitable quarter in July of 2009, Tesla Motors is going public. The company will be offering 11.1 million shares to investors, at an expected valuation of $14 to $16 each, for up to $177.6 million in capital. It's a big-money step for a

Housing market collapses after tax credit expires

Given the size of the US population now (307 million) vs the population in 1963 (189 million),  these numbers are even more staggering. 

Sales of US new Homes sales plunge to lowest level on record--Bloomberg

"Purchases of U.S. new homes fell in May to the lowest level on record after a tax credit expired, showing the market remains dependent on government support.

Sales collapsed an

SSRN-Initial Day Return and Underpricing Cost in Advance Payment Initial Public Offerings by Joseph Fung, Sanry Che

SSRN-Initial Day Return and Underpricing Cost in Advance Payment Initial Public Offerings by Joseph Fung, Sanry Che:

IPO underpricing has been looked at in almost every way.  And yet there always seems to be another angle.  In this paper Fang and Che look at IPOs in Hong Kong where, unlike in the US, IPOs are paid for in advance. 

Some look-ins:

"The Hong Kong IPO market was ranked second

How Much Is a CEO Worth? - BusinessWeek

How Much Is a CEO Worth? - BusinessWeek:
"Graef Crystal, a pioneer in compensation consulting, analyzed the 2009 pay of 271 chief executive officers. His findings? 'Simply put,' Crystal says, 'companies don't pay for performance.'

.... Crystal, 76, developed the formulas he uses over the course of 30 years advising companies....In an ideal world, Crystal and many investors agree, stock

One more worry for banks: Wal-Mart - Jun. 22, 2010

An easy, interesting article for a Commercial Bank Management class or even Money and Banking:One more worry for banks: Wal-Mart - Jun. 22, 2010: "'Wal-Mart's income from the provision of financial services is currently an insignificant part of their overall income,' says Rajesh Narayanan, finance professor at Louisiana State University. 'But the rapidity which they have expanded their services

Don’t Gut Proxy Access - DealBook Blog - NYTimes.com

I could not agree more!!! Great article by Harvard's Lucian Bebchuk.





Short version: strengthen corporate governance practices even though management may not want you to!

Another View: Don’t Gut Proxy Access - DealBook Blog - NYTimes.com:
"While shareholder power to elect new directors is supposed to serve as a foundation for our system of corporate governance, American shareholders

SSRN-CEO Interviews on CNBC by Felix Meschke, Young Han Kim

Definitely will be mentioned in class. Up on anticipation, then reverses. SSRN-CEO Interviews on CNBC by Felix Meschke, Young Han Kim: "This paper investigates whether media attention systematically affects stock prices by analyzing price and volume reactions to 6,937 CEO interviews that were broadcast on CNBC between 1997 and 2006. We document a significant positive abnormal return of 162 basis

Behavioral Real Estate

Need more evidence of the impact of seemingly irrational behavior?  Look no further than the Real Estate Market where Seiler, Lane, and Seiler find that people make decisions that differ substantially from what classic economists would suggest.

Mental Accounting and False Reference Points in Real Estate Investment Decisions by Seiler, Lane, and Seiler. 

From Abstract:
"We find a

Stanford Graduate School of Business Research: Saving for Retirement? Beware the 4% Rule | Business Wire

Stanford Graduate School of Business Research: Saving for Retirement? Beware the 4% Rule | Business Wire:
"If a retiree adopts a 4% rule, he will waste money by purchasing surpluses, will overpay for his spending distribution, and may be saddled with an inferior spending plan,' wrote Sharpe and colleagues Jason Scott, managing director of the Retiree Research Center at Financial Engines, and

Dan Ariely: The Mind's Grey Areas - Forbes.com

I just got his second book, The Upside of Irrationality.  (the first was great and is used in class often)

In an example of good timing (probably not coincidental or irrational!).
Dan Ariely: The Mind's Grey Areas"We have recently seen a number of big corporate frauds and stock market scandals. The question arises: is it just the case of a few bad apples or is it a deeper systemic problem? 

SSRN-Is There a Correlation between World Cups and S&P 500 Performance? by Ralph Baddour

SSRN-Is There a Correlation between World Cups and S&P 500 Performance? by Ralph Baddour:
"...using data from 1950 to 2006, it was shown empirically that the S&P 500 Composite Index has an expected return of -2% over the period of a FIFA World Cup tournament. This relationship could be classified as a subset of the calendar effect class of behavioral finance anomalies."

Yeah...not going to put

SSRN-Validity of Capital Assets Pricing Model: Evidence from KSE-Pakistan by Uzair Bhatti, Muhammad Hanif

Beating a dead horse? More evidence that CAPM does not work as currently constructed.SSRN-Validity of Capital Assets Pricing Model: Evidence from KSE-Pakistan by Uzair Bhatti, Muhammad Hanif: "Purpose of the research is to form an opinion about authenticity and validity of CAPM. Our methodology includes the beta calculation through variance/covariance approach in order to predict the required

Fannie, Freddie to delist from NYSE - Jun. 16, 2010

Fannie, Freddie to delist from NYSE - Jun. 16, 2010: "Mortgage finance giants Fannie Mae and Freddie Mac were ordered by their federal regulator to no longer trade their shares on the New York Stock Exchange, the agency announced Wednesday. Both stocks plummeted on the news."and later:"Shares of Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) both plunged about 50% in

Women Prefer Men Holding State Bonds, Japan Ad Says (Update1) - Bloomberg.co.jp

Women Prefer Men Holding State Bonds, Japan Ad Says (Update1) - Bloomberg.co.jp: "Japanese women are seeking men who invest in government bonds, according to an advertisement being run by the Ministry of Finance....The government’s plan to attract marrying-age men comes after a campaign aimed at retirees started last August. That push featured Junko Kubo, a former anchor on Japan’s public

Role of allocation from Ibbotson

Advisor Perspectives: "Another way to understand the contributors to return variance, Ibbotson said, is to consider a four-step process that looks like this: You begin by assuming you start with cash, then you go to an average asset mix, and then you go to the specific policy mix for a particular fund. Finally, you put in active management, which consists of actively managing your asset

The Economics of Libertarianism, Revealed - Economix Blog - NYTimes.com

The Economics of Libertarianism, Revealed - Economix Blog - NYTimes.com: "Libertarianism rests on two bedrock beliefs: human freedom is a great good and the public sector tends to screw things up. The first belief is based more on faith than empirical result; the second derives from millennia of human experience. The increased appeal of libertarianism today reflects a nonpartisan view that the

Nobelist Merton Rejoins MIT Sloan School From Harvard (Update2) - BusinessWeek

Nobelist Merton Rejoins MIT Sloan School From Harvard (Update2) - BusinessWeek: "Robert C. Merton, winner of the 1997 Nobel Prize in economics, said he will rejoin the faculty of the Massachusetts of Institute of Technology’s Sloan School of Management to focus on training students in quantitative finance....He will retire from Harvard Business School at the end of this month after 22 years, he

SSRN-Too Big to Fail in Financial Crisis: Motives, Countermeasures, and Prospects by Bernard Shull

SSRN-Too Big to Fail in Financial Crisis: Motives, Countermeasures, and Prospects by Bernard Shull: "This paper proceeds on the view that a better understanding of why too-big-to-fail policies have persisted will provide a stronger basis for developing effective reforms. After a review of experience in the United States over the last 40 years, it considers a number of possible motives. The