http://financeprofessorblog.blogspot.com/Finance News, Academic articles, and other things from FinanceProfessor.com. Remember Finance is not only important, but it is also fun!!!ennoreply@blogger.com (FinanceProfessor)Mon, 21 May 2012 12:45:52 PDTBlogger http://www.blogger.com2370125Financeprofessorcomhttp://feedburner.google.comThis is an XML content feed. It is intended to be viewed in a newsreader or syndicated to another site.http://feedproxy.google.com/~r/Financeprofessorcom/~3/Xr05es07uaE/home-in-colonias-new-york-times.htmlnoreply@blogger.com (FinanceProfessor)Wed, 25 Apr 2012 22:08:46 PDTtag:blogger.com,1999:blog-7332340.post-440779200109462058A Home in the Colonias | The New York Times This video is about 5 years old, but it shows some the living conditions where we will be working in South Texas.    The New York Times Here is some more: Border Communities: The Case of Colonias in Texas by Cecilia Giusti "Education levels are very low there. In El Cenizo, one established colonia in Webb County, only 15 per cent of people older0http://financeprofessorblog.blogspot.com/2012/04/home-in-colonias-new-york-times.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/5tcstvfOZuo/shrinking-universe.htmlnoreply@blogger.com (FinanceProfessor)Wed, 25 Apr 2012 08:04:35 PDTtag:blogger.com,1999:blog-7332340.post-3864343969408372471AM reading: Common Sense of Mutual Funds by John Bogle.  Here is a really cool insight: Page 359: he is writing about the fact that given normal restrictions (not owning more than 2% of portfolio in any single asset and not owning more than 5% of shares of any individual company), the number of potential investments drops significantly.  For example, using 2009 data, a 1 Billion fund could0http://financeprofessorblog.blogspot.com/2012/04/shrinking-universe.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/RwrXiXsAf6c/why-us-companies-continue-to-pay.htmlnoreply@blogger.com (FinanceProfessor)Mon, 23 Apr 2012 22:28:35 PDTtag:blogger.com,1999:blog-7332340.post-7656124074942601083Why U.S. Companies Continue to Pay Dividends - Bloomberg: Love it!  Virtually identical to our class discussions: "It seems clear from our recent work that dividends are very resilient, and are unlikely to disappear. What explains this staying power? First, some argue that dividends provide important “signals” about the strength or quality of the firm’s underlying earnings stream. (Because0http://financeprofessorblog.blogspot.com/2012/04/why-us-companies-continue-to-pay.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/sgf6aUmm4mo/wall-street-warriors.htmlvideonoreply@blogger.com (FinanceProfessor)Tue, 03 Apr 2012 07:49:41 PDTtag:blogger.com,1999:blog-7332340.post-1583202614550234149A look at what it can be like to work on Wall Street. (this episode focuses on "winners" in Hedge funds, commodities, and currency trading):0http://financeprofessorblog.blogspot.com/2012/04/wall-street-warriors.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/MadLS9JXFPQ/i-am-back.htmlnoreply@blogger.com (FinanceProfessor)Tue, 03 Apr 2012 07:47:48 PDTtag:blogger.com,1999:blog-7332340.post-7996090304841634817I realize I have been gone, but I was very busy nursing my mom in her battle against breast cancer. It pains beyond words that we lost the battle. I will try to get more articles up in the coming weeks. I also encourage you to "like" financeprofessor on facebook where I do share articles in a much faster manner.0http://financeprofessorblog.blogspot.com/2012/04/i-am-back.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/s36gHHsx604/video-on-etf-creation-and-redemption.htmlETFnoreply@blogger.com (FinanceProfessor)Fri, 02 Mar 2012 22:11:11 PSTtag:blogger.com,1999:blog-7332340.post-4729324997586976426Good stuff! 0http://financeprofessorblog.blogspot.com/2012/03/video-on-etf-creation-and-redemption.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/FCqLkWw4-Go/wall-street-bonus-drop-means-trading.htmlnoreply@blogger.com (FinanceProfessor)Wed, 29 Feb 2012 09:44:21 PSTtag:blogger.com,1999:blog-7332340.post-1634062039968550398Wall Street Bonus Drop Means Trading Aspen for Discount Cereal - Bloomberg Everything is relative. Pay cuts at $35,000 or $350,000 a year hurt: Bloomberg has a personal interest story on how Wall Street bonus cuts have hurt those who had expected to get more money. "The smaller bonus checks that hit accounts across the financial-services industry this month are making it difficult to1http://financeprofessorblog.blogspot.com/2012/02/wall-street-bonus-drop-means-trading.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/ytH68RwQBss/5-simple-hedge-strategies-for-volatile.htmlnoreply@blogger.com (FinanceProfessor)Wed, 29 Feb 2012 08:44:24 PSTtag:blogger.com,1999:blog-7332340.post-88999370565032499885 Simple Hedge Strategies for Volatile Times - ForbesI am not convinced these are really "strategies", but more ideas of things you should give some attention. For example market volatility, credit risks, risk of low returns, inflation. Not so much a "how to" article, but more of a useful reminder of the various risks investors face. :A rather long "look-in":"Dawal encourages a portfolio that1http://financeprofessorblog.blogspot.com/2012/02/5-simple-hedge-strategies-for-volatile.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/7VRF0WM_ASY/could-twitter-predict-stock-market.htmlnoreply@blogger.com (FinanceProfessor)Wed, 29 Feb 2012 07:18:51 PSTtag:blogger.com,1999:blog-7332340.post-2027656228590641620Could Twitter predict the stock market? | ReutersNice article for class from Reuters:"A basic premise of behavioral economics is that the markets aren't perfectly rational machines, but are expressions of human emotions like greed and fear. If you agree with that premise, and are looking for an immediate gauge of those human sentiments, then Twitter is one of the greatest tools ever invented.0http://financeprofessorblog.blogspot.com/2012/02/could-twitter-predict-stock-market.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/drQA2tvbyvA/why-do-individuals-exhibit-investment.htmlBehavorial Financeneuroeconomicsbehavioral financenoreply@blogger.com (FinanceProfessor)Mon, 27 Feb 2012 11:31:00 PSTtag:blogger.com,1999:blog-7332340.post-4116265988819678416Why Do Individuals Exhibit Investment Biases? by Henrik Cronqvist, Stephan Siegel :: SSRN Abstract: "We find that a long list of investment biases, e.g., the reluctance to realize losses, performance chasing, and the home bias, are "human," in the sense that we are born with them. Genetic factors explain up to 50% of the variation in these biases across individuals. We find no1http://financeprofessorblog.blogspot.com/2012/02/why-do-individuals-exhibit-investment.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/8VxHC92QJDk/too-much-cash-in-corner-office.htmlnoreply@blogger.com (FinanceProfessor)Mon, 27 Feb 2012 08:04:29 PSTtag:blogger.com,1999:blog-7332340.post-571475555284502502Too Much Cash in the Corner Office - BusinessweekA definite must-read for my classes!"In 2008, the CEOs who run companies in the Standard & Poor’s 500-stock index earned, in total, less than 1 percent of what everyone who’s a 1 percenter earned. So it’s unfair to blame CEOs alone for fostering inequality. Defenders of the system cite such data to advance a larger claim. Pay for public company0http://financeprofessorblog.blogspot.com/2012/02/too-much-cash-in-corner-office.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/byJgksyshnY/ubs-hires-former-bear-stearns-cfo.htmlnoreply@blogger.com (FinanceProfessor)Mon, 27 Feb 2012 07:52:38 PSTtag:blogger.com,1999:blog-7332340.post-3527836315680581896UBS hires former Bear Stearns CFO Molinaro | Reuters"UBS has hired former Bear Stearns financial chief Sam Molinaro as operating head of its investment bank effective March 1, according to a memorandum seen on Friday by Reuters."Congratulations to St. Bonaventure Graduate Sam Molinaro:0http://financeprofessorblog.blogspot.com/2012/02/ubs-hires-former-bear-stearns-cfo.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/ulTw14JfUIY/dog-that-did-not-bark-insider-trading.htmlnoreply@blogger.com (FinanceProfessor)Mon, 27 Feb 2012 07:50:53 PSTtag:blogger.com,1999:blog-7332340.post-6131264097274889503The Dog that Did Not Bark: Insider Trading and Crashes by Jose Marin, Jacques Olivier :: SSRNInteresting. And sort of unexpected.Marin and Olivier document "that at the individual stock level, insiders’ sales peak many months before a large drop in the stock price, while insiders’ purchases peak only the month before a large jump.We provide a theoretical explanation for this phenomenon based0http://financeprofessorblog.blogspot.com/2012/02/dog-that-did-not-bark-insider-trading.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/vFo50L8eQmg/hedging-demand-halts-issuance-of-credit.htmlnoreply@blogger.com (FinanceProfessor)Sat, 25 Feb 2012 08:05:24 PSTtag:blogger.com,1999:blog-7332340.post-2586514716815974652Hedging Demand Halts Issuance of Credit Suisse VIX Note: Options - Bloomberg:"Credit Suisse suspended the creation of new stock in the VelocityShares Daily 2x VIX Short-Term ETN on Feb. 21 after its market value more than quadrupled in 2012 to a record $694.4 million, data compiled by Bloomberg show. Shares outstanding have surged 699 percent since Dec. 30 as the S&P 500 climbed 8 percent and0http://financeprofessorblog.blogspot.com/2012/02/hedging-demand-halts-issuance-of-credit.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/q2gmPck_Fqw/asset-price-bubbles-survey-by-anna.htmlBubblesmarket efficiencyHousing bubblenoreply@blogger.com (FinanceProfessor)Fri, 10 Feb 2012 08:12:11 PSTtag:blogger.com,1999:blog-7332340.post-2775266437343868736Image via Wikipedia Asset Price Bubbles: A Survey by Anna Scherbina, Bernd Schlusche :: SSRN In class next week we will be talking about bubbles. No not this one, nor even this one, but financial bubbles. Financial bubbles have a long history going back decades. A few examples: the famous Dutch Tulip Bubble, the South Sea Bubble (1720)--BTW WATCH THIS short video on it, VERY GOOD!),the late1http://financeprofessorblog.blogspot.com/2012/02/asset-price-bubbles-survey-by-anna.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/oK1hTV62noI/study-consumers-keep-up-or-down-with.htmlBehavorial Financenoreply@blogger.com (FinanceProfessor)Thu, 09 Feb 2012 21:59:34 PSTtag:blogger.com,1999:blog-7332340.post-8206351135355497207           (Photo credit: Anders V)Study: Consumers Keep Up -- or Down -- with the Joneses During Recession - Duke's Fuqua School of Business: It has long been a question as to why spending is reduced in a recession for many whose income seemingly has not fallen (or at least not enough to warrant income based cutbacks). Now we may have the answer thanks to Wagner Kamakura and Rex Du1http://financeprofessorblog.blogspot.com/2012/02/study-consumers-keep-up-or-down-with.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/JKZzvTOzXQA/jurf-journal-of-undergraduate-research.htmlJURFcall for papersnoreply@blogger.com (FinanceProfessor)Thu, 09 Feb 2012 13:47:18 PSTtag:blogger.com,1999:blog-7332340.post-5159159558578193528The deadline for submissions is May 31, 2012. The Mark J. Bertus Prize, sponsored by CFA Institute, will be awarded for the best paper in the JURF. Authors of the top three articles will be invited to present their research at the Financial Management Association meeting in Atlanta in October 2012. A panel of judges will select the winner who will also0http://financeprofessorblog.blogspot.com/2012/02/jurf-journal-of-undergraduate-research.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/A7tVsRZlACQ/diamond-foods-debacle-may-crack-open.htmltakeovers"CEO succession"noreply@blogger.com (FinanceProfessor)Thu, 09 Feb 2012 13:36:09 PSTtag:blogger.com,1999:blog-7332340.post-341229648803624068       (Photo credit: iateapie)Ok, I learned something. A MAC is more than just a computer...a Material Adverse Change. Diamond Foods Debacle May Crack Open a MAC - NYTimes.com: "A rare event occurred late on Wednesday in the deal world. Diamond Foods, the seller of Emerald snack nuts, announced it would restate its financial results for two years. It also placed its chief executive,0http://financeprofessorblog.blogspot.com/2012/02/diamond-foods-debacle-may-crack-open.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/zmRIpJZ1fAo/simple-options-thrive-in-risky-world.htmlderivativesnoreply@blogger.com (FinanceProfessor)Wed, 08 Feb 2012 18:10:20 PSTtag:blogger.com,1999:blog-7332340.post-7918448556700615420Simple options thrive in risky world - SuperDerivatives | Reuters: "What we see is that people are pricing fairly simple structured products, fairly commoditised products. It's not what we saw five or six years ago when every month banks were inventing a new product." The pace of growth in the equity derivatives market has slumped from the 33 percent seen in 2007 - before the 2008 collapse of0http://financeprofessorblog.blogspot.com/2012/02/simple-options-thrive-in-risky-world.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/VvmOj35rH2s/jobless-decline-masks-drop-in-us-labor.htmlnoreply@blogger.com (FinanceProfessor)Wed, 08 Feb 2012 09:09:07 PSTtag:blogger.com,1999:blog-7332340.post-5001703834618094092Jobless Decline Masks Drop in U.S. Labor Force - Bloomberg:"The jump in the count of those not in the labor force caused the participation rate to drop to 63.7 percent last month, the lowest since May 1983. About 88 million Americans aged 16 years or older didn’t have a job and weren’t trying to find one, the new data showed.The unemployment rate, which only counts people who say they are0http://financeprofessorblog.blogspot.com/2012/02/jobless-decline-masks-drop-in-us-labor.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/1-6CMQEQaSc/funny-stuff-academic-weasel-words.htmlfunnoreply@blogger.com (FinanceProfessor)Tue, 07 Feb 2012 07:36:50 PSTtag:blogger.com,1999:blog-7332340.post-5119760440495165127If you have ever been to a finance conference or read many academic finance articles, you will get a laugh out of this picture from Barry Ritholz........H/t to MoneyScience.0http://financeprofessorblog.blogspot.com/2012/02/funny-stuff-academic-weasel-words.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/cuNSsCYMpWw/professor-is-wary-of-exciting.htmlindexingmutual fundsindividual investornoreply@blogger.com (FinanceProfessor)Tue, 07 Feb 2012 07:23:31 PSTtag:blogger.com,1999:blog-7332340.post-4224952582032113369Professor Is Wary of 'Exciting' Investments and Suggests Mutual Funds to Buy - WSJ.com: A very good article and interview with FinanceProfessor David Snowball who runs MutualFundObserver. Two look-ins: "There's a concept called the loser's game, and in the loser's game the winner is the person who makes the fewest mistakes. If you ever go and play tennis with one of your neighbors, in all0http://financeprofessorblog.blogspot.com/2012/02/professor-is-wary-of-exciting.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/ibPZGXdrakU/just-how-efficient-is-market-seeking.htmlmarket efficiencynoreply@blogger.com (FinanceProfessor)Mon, 06 Feb 2012 15:29:49 PSTtag:blogger.com,1999:blog-7332340.post-4454753790703331328Just How Efficient Is The Market? - Seeking Alpha: The debate on whether Markets are efficient or not is seemingly never ending and in the end a debate no longer of absolutes ("it is" or "it is not") but one of degree ("not perfect but good" vs "not even close"). Seeking Alpha's Stockopedia lays out the case for the latter (Markets are not even close to efficient) but first attacking the0http://financeprofessorblog.blogspot.com/2012/02/just-how-efficient-is-market-seeking.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/VJKPEa1-v1I/senate-oks-bill-barring-congress-from.htmlnoreply@blogger.com (FinanceProfessor)Thu, 02 Feb 2012 21:27:20 PSTtag:blogger.com,1999:blog-7332340.post-5574926892607255954Senate OK’s bill barring Congress from insider trading - Nation - The Boston Globe:Remember the 60 Minute Piece that exposed insider trading? It seems it is having a desired effect. "The Senate overwhelmingly passed legislation yesterday to explicitly prohibit members of Congress and their staffs from financially profiting from insider information, a rare bipartisan effort that is expected to be0http://financeprofessorblog.blogspot.com/2012/02/senate-oks-bill-barring-congress-from.htmlhttp://feedproxy.google.com/~r/Financeprofessorcom/~3/j_KGVAWqQS4/financial-reporting-quality-in-us.htmlnoreply@blogger.com (FinanceProfessor)Wed, 01 Feb 2012 08:04:13 PSTtag:blogger.com,1999:blog-7332340.post-7293176202192499224Financial Reporting Quality in U.S. Private Firms by Ole-Kristian Hope, Wayne Thomas, Dushyantkumar Vyas :: SSRN: "We provide a large-scale investigation of financial reporting quality (FRQ) among U.S. private firms. Private firms are vital to the economy but have received limited attention from researchers due to a lack of available data. Using a new database that contains accounting data for a0http://financeprofessorblog.blogspot.com/2012/02/financial-reporting-quality-in-us.html