- CXO Advisory Group has don w number of interesting pieces. Here they highlight on research showing that institutional investors aren't really all that good at hiring and firing money managers. In This piece, they review research on the value of Return on Invested Capital (ROIC) as a factor that explains stock returns
- Both DealBook and Going Private discuss an op-ed piece by Steven Rattner on a likely bad ending to the private equity boom
- Want to know more about cognitive biases? Barry Ritholtz points to a Wikipedia piece that lists the 26 most studied and widely accepted cognitive biases.
- Need to send a large file (and you or the person you're sending it to uses an email service that can't handle it)? Use DropSend or YouSendIt. The first service requires a small bit of personal info, but also offers some storage.
21 Haziran 2007 Perşembe
Link Dump
It's been a while, so I thought I'd do a short Link Dump to clean out my Bloglines account:
20 Haziran 2007 Çarşamba
Becoming a More Productive Writer
Like most faculty I know, I could stand to be more disciplined in my writing. There are times when I'm really productive, and stretches that I don't do anything. One tactic that has been extremely helpful (at least when I use it) has been keeping a writing log. Although I've mentioned this before, it bears repeating. Robert Boice (the acknowledged master of research on faculty productivity) did quite a few workshops on faculty productivity. He did a study where participants were put into three groups
So this time, to tweak things a bit, I set up a spreadsheet on Google Spreadsheets with a current student, a former student, and a regular coauthor of mine. We've all committed to record out writing time and output daily. It should be interesting--there's already been one day that I put in a half hour at 11:00 p.m. just to avoid having to show a goose egg for the day.
Ya gotta love accountability. I'll let y'all know how it turns out.
update: In case you're interested, two books by Boice that are well worth picking up are Advice For New Faculty Members (the title is misleading - I got a lot out of it even 6 years out of grad school) and Professors as Writers.
- The first group (the "control") continued as they normally did, and continued to write occasionally in large blocks of time (what I call "binge writing"). In a year's time, they produced an average of 17 pages of output
- The second group wrote daily and kept log of their time spent writing and their approximate output. In a year's time, they produced an average of 64 pages of output.
- The third group wrote daily, kept a daily log, and showed it to someone else weekly. They produced an average of 157 pages in a year!
So this time, to tweak things a bit, I set up a spreadsheet on Google Spreadsheets with a current student, a former student, and a regular coauthor of mine. We've all committed to record out writing time and output daily. It should be interesting--there's already been one day that I put in a half hour at 11:00 p.m. just to avoid having to show a goose egg for the day.
Ya gotta love accountability. I'll let y'all know how it turns out.
update: In case you're interested, two books by Boice that are well worth picking up are Advice For New Faculty Members (the title is misleading - I got a lot out of it even 6 years out of grad school) and Professors as Writers.
19 Haziran 2007 Salı
There's No Free Lunch
And as a corporate person would say, reorganizations are extremely costly...
Compliments of PHDcomics.com
So far, seventeen years and no "reorganizations" in the Unknown Household.
Compliments of PHDcomics.com
So far, seventeen years and no "reorganizations" in the Unknown Household.
14 Haziran 2007 Perşembe
Aleutian Fusion
Almost forgot about this blog. Here's a mass e I just sent out to friends:
Mass e time again. I'm in the Alaskan Aleutian chain now, in Port Moller, on the Bering Sea side, out in the middle of nowhere!
My friend, Ray, has a fishing boat & has been asking me to come up here to be his deck-hand for months, and I've always wanted to go to the Aleutians since a kid. What was holding me back was I didn't wanna spoil my moneyless venture. But, adventure junky I am, my desire to see the Aleutians superceded all & I said yes, but I didn't want to be paid. However, pay or no, I have also had misgivings about plunging into & supporting such a market industry. That's something to talk about later. (But I can tell this is so good for me, to keep my feet in all worlds, to understand all facets of life, all points of view).
Later, Ray told me a third person, Stephan (pron "Stefan") was coming. I was also having misgivings about spending 3 mos. on a small boat with somebody I'd never met. I'm with 2 total heteros who work construction together in Moab. But it turns out the 3 of us are like 3 p's in a pod. I liked Stephan when first meeting him, but my doubts totally left when we flew into Anchorage and Stephan's luggage was totally lost. It didn't even phase him. He was cheery as ever, taking it as part of the adventure. I then realilzed what a high-quality human b he was, & he's very philosophical under the surface.
We've been in Port Moller for days now, but haven't launched to sea yet. Takes a while to prep the boat, especially after the hard Alaskan winter. We've been sleeping & cooking in the boat - giving us a taste of life on the water. All 3 of us have been having so much fun & getting along together so well it amazes me. It's almost mystical, like Ray intuited that we would could be so compatible. So far. And we couldn't ask for a better skipper than Ray. He's totally easy-going, non-hierarchical, yet has our total respect and we feel we'd do anything for him.
Port Moller is near the end of the Alaskan Peninsula, not quite an island. It is on a fairly flat area with big snowy mountains & a couple active volcanoes nearby. It's been around 60 degrees F in the day, & the dark night is only a couple hours long. The sun pokes out a few times during the day, but there are always clouds, & it often drizzles.
Huge brown bears & foxes roam freely everywhere, especially in the evening. They like the dump, and they come around the boat yard daily, as do the foxes, looking for scraps. For some reason, brown bears are called grizzly bears in the interior, but not on the coastal areas, though they're the same species, & no less dangerous. Some of the foxes here are red, and some black & grey, with black "boots" on their legs. I'm not sure what kind they are, yet. But the foxes have no fear and come really close to us.
Bald eagles & seals are everywhere, too. I found a dead bald eagle near the beach the other day, which Stephan & I hiked out to again last night.
We have the boat all loaded up with food & have been taking turns cooking. We have a small stove in the cabin that runs off the engine diesel, & a bbq grill outside. Ray likes to bbq a lot, so that's what we eat most of. The salmon is heavenly. We've been getting fresh veggies now & then from the port store, but will have to do with canned while out to sea. Ray likes his red wine & Stephan likes his beer, so we're going through it fast, so we'll probably have a "dry" boat while fishing. My body chemistry can handle drinking only now & then.
The adventure is just beginning, & you probably won't hear from me again some time since I can only e while we're at port, & e time is limited.
Oh, yeah, we're likely here until September, at which time I have a return flight to Portland, OR.
Have a glorious summer, where-ever you are.
Daniel
aka
Suelo
Mass e time again. I'm in the Alaskan Aleutian chain now, in Port Moller, on the Bering Sea side, out in the middle of nowhere!
My friend, Ray, has a fishing boat & has been asking me to come up here to be his deck-hand for months, and I've always wanted to go to the Aleutians since a kid. What was holding me back was I didn't wanna spoil my moneyless venture. But, adventure junky I am, my desire to see the Aleutians superceded all & I said yes, but I didn't want to be paid. However, pay or no, I have also had misgivings about plunging into & supporting such a market industry. That's something to talk about later. (But I can tell this is so good for me, to keep my feet in all worlds, to understand all facets of life, all points of view).
Later, Ray told me a third person, Stephan (pron "Stefan") was coming. I was also having misgivings about spending 3 mos. on a small boat with somebody I'd never met. I'm with 2 total heteros who work construction together in Moab. But it turns out the 3 of us are like 3 p's in a pod. I liked Stephan when first meeting him, but my doubts totally left when we flew into Anchorage and Stephan's luggage was totally lost. It didn't even phase him. He was cheery as ever, taking it as part of the adventure. I then realilzed what a high-quality human b he was, & he's very philosophical under the surface.
We've been in Port Moller for days now, but haven't launched to sea yet. Takes a while to prep the boat, especially after the hard Alaskan winter. We've been sleeping & cooking in the boat - giving us a taste of life on the water. All 3 of us have been having so much fun & getting along together so well it amazes me. It's almost mystical, like Ray intuited that we would could be so compatible. So far. And we couldn't ask for a better skipper than Ray. He's totally easy-going, non-hierarchical, yet has our total respect and we feel we'd do anything for him.
Port Moller is near the end of the Alaskan Peninsula, not quite an island. It is on a fairly flat area with big snowy mountains & a couple active volcanoes nearby. It's been around 60 degrees F in the day, & the dark night is only a couple hours long. The sun pokes out a few times during the day, but there are always clouds, & it often drizzles.
Huge brown bears & foxes roam freely everywhere, especially in the evening. They like the dump, and they come around the boat yard daily, as do the foxes, looking for scraps. For some reason, brown bears are called grizzly bears in the interior, but not on the coastal areas, though they're the same species, & no less dangerous. Some of the foxes here are red, and some black & grey, with black "boots" on their legs. I'm not sure what kind they are, yet. But the foxes have no fear and come really close to us.
Bald eagles & seals are everywhere, too. I found a dead bald eagle near the beach the other day, which Stephan & I hiked out to again last night.
We have the boat all loaded up with food & have been taking turns cooking. We have a small stove in the cabin that runs off the engine diesel, & a bbq grill outside. Ray likes to bbq a lot, so that's what we eat most of. The salmon is heavenly. We've been getting fresh veggies now & then from the port store, but will have to do with canned while out to sea. Ray likes his red wine & Stephan likes his beer, so we're going through it fast, so we'll probably have a "dry" boat while fishing. My body chemistry can handle drinking only now & then.
The adventure is just beginning, & you probably won't hear from me again some time since I can only e while we're at port, & e time is limited.
Oh, yeah, we're likely here until September, at which time I have a return flight to Portland, OR.
Have a glorious summer, where-ever you are.
Daniel
aka
Suelo
12 Haziran 2007 Salı
On The Road Again...
I'll be out of town for a few days (in Washington) meeting with some coauthors to work on a number of projects. They'll probably work me pretty hard, so blogging will likely be light until Saturday.
But it's not like I'm getting paid for this, so I don't feel too bad.
Now I have to suck up to (er, that is, er "meet") with the head of the alumni board and the VP of advancement (the university's fund raising area). We're trying to get more money out of them for our student managed investment fund. We're hoping that we can convince the alumni to let us "charge" a management fee that we can then use to fund some finance-related student activities (like scholarships for CFA study materials, sending a couple of student each year to the RISE Forum at the U. of Dayton, and so on).
update: The meeting went pretty well. Looks like our students might be getting some money. Woo Hoo!
But it's not like I'm getting paid for this, so I don't feel too bad.
Now I have to suck up to (er, that is, er "meet") with the head of the alumni board and the VP of advancement (the university's fund raising area). We're trying to get more money out of them for our student managed investment fund. We're hoping that we can convince the alumni to let us "charge" a management fee that we can then use to fund some finance-related student activities (like scholarships for CFA study materials, sending a couple of student each year to the RISE Forum at the U. of Dayton, and so on).
update: The meeting went pretty well. Looks like our students might be getting some money. Woo Hoo!
11 Haziran 2007 Pazartesi
Connections, Networks, and Investment Managers' Performance
One argument for going to a top school is that you get to tap into the alumni network and make connections with classmates that will help you in future years. Here's some interesting evidence that it's true in the investment world. Cohen, Frazzini, and Malloy examined how school ties affected the investment patterns of mutual fund managers in a paper, titled "The Small World of Investing: Board Connections and Mutual Fund Returns." They examined whether mutual fund managers invested differently in a company when someone from their school sat on the board. They found that:
It's a pretty interesting piece - it appears that they superior returns weren't merely a reflection of the managers knowing more about the ability of the board member. The most telling finding was that the returns were concentrated around specific news events. Hence, they were more likely to be driven by "inside" information.
All in all a paper worth reading (or at least, discussing in class).
- When the manager and the board member went to the same school, the manager took a significantly bigger stake in the company
- These "connected" investments gave significantly higher returns (a portfolio of connected investments outperformed non-connected ones by over 8% per year)
- The abnormal returns on connected investments were concentrated around corporate events such as earnings announcements.
It's a pretty interesting piece - it appears that they superior returns weren't merely a reflection of the managers knowing more about the ability of the board member. The most telling finding was that the returns were concentrated around specific news events. Hence, they were more likely to be driven by "inside" information.
All in all a paper worth reading (or at least, discussing in class).
8 Haziran 2007 Cuma
What Do Entry-Level Investment Banking Jobs Pay?
Many of my readers (all three of them) are finance majors and at least somewhat interested in what the $$$ is like working on Wall street. Just how much can you make on Wall Street?
Luckily, a former classmate from grad school (and one of my three regular readers) just sent me this quick look (from DealBreaker.com) at the bonus side of the Wall Street Cheddar for Investment Banking analysts. These are median figures, by the way:
And this piece on WallStreetPrep.com gives the typical first year salary for analysts as being in the $55-70K range, with a signing bonus of about $10k. So, adding it all up. total first year compensation (not counting signing bonus) ends up around $145-$180K.
These are for analyst positions, which are the likely spot that an undergrad would start (the associates are usually MBAs).
This seems like a lot of money for a first job (and it is). But when you consider that the typical analyst regularly puts in 80-100 hours (or more) a week, it's like having two full time jobs (in fact, based on the emails I've gotten, 100+ hours isn't uncommon, and an 80 hour week would be considered a vacation by most bankers). That's too much like work for my tastes (which is why I'm an academic). But not surprisingly, thes jobs are highly sought after. If I was 22 again and wired that way, I'd' probably try to go that way too. But I'd end up burning out after a couple of years, even if I made it that far.
If anyone has similar figures for Venture Capital and Private Equity, let me know.
update: Here's another link to salaries and bonuses for traders (compliments of Jim Mahar at Financeprofessor.com)
Luckily, a former classmate from grad school (and one of my three regular readers) just sent me this quick look (from DealBreaker.com) at the bonus side of the Wall Street Cheddar for Investment Banking analysts. These are median figures, by the way:
And this piece on WallStreetPrep.com gives the typical first year salary for analysts as being in the $55-70K range, with a signing bonus of about $10k. So, adding it all up. total first year compensation (not counting signing bonus) ends up around $145-$180K.
These are for analyst positions, which are the likely spot that an undergrad would start (the associates are usually MBAs).
This seems like a lot of money for a first job (and it is). But when you consider that the typical analyst regularly puts in 80-100 hours (or more) a week, it's like having two full time jobs (in fact, based on the emails I've gotten, 100+ hours isn't uncommon, and an 80 hour week would be considered a vacation by most bankers). That's too much like work for my tastes (which is why I'm an academic). But not surprisingly, thes jobs are highly sought after. If I was 22 again and wired that way, I'd' probably try to go that way too. But I'd end up burning out after a couple of years, even if I made it that far.
If anyone has similar figures for Venture Capital and Private Equity, let me know.
update: Here's another link to salaries and bonuses for traders (compliments of Jim Mahar at Financeprofessor.com)
7 Haziran 2007 Perşembe
Not a Smart Move
For those of you who are A) writing a thesis, B) married, and C) want to stay that way, here's a good tip for your dissertation:
Compliments of phdcomics.com.
Compliments of phdcomics.com.
4 Haziran 2007 Pazartesi
Best Baseball Meltdown Ever
This video of Mississippi Braves' (the Atlanta Braves' AA minor league team) manager Phillipp Wellman completely losing it shows just how much fun minor league baseball can be. At a minor league game, you see some pretty good players, but also a lot of bat-crazy antics. Even better, you're so close to the action you can just about see a losing-it manager foaming at the mouth. This reminds me - I have to buy some tickets to our local minor league team. It's time for the Unknown kids to see what a day at the ballpark is all about.
1 Haziran 2007 Cuma
No, You Can't
I'm not teaching this summer - time for research (and getting in shape). But I wish I'd had this last semester around, oh, May or so.
In case you're interested, there are plenty more good education-related cartoons at "Teachable Moments" (a regular feature at Inside Higher Education).
In case you're interested, there are plenty more good education-related cartoons at "Teachable Moments" (a regular feature at Inside Higher Education).
Negotiating
In a previous life, I taught a pretty large class on personal finance. Among other things, this sparked my interest in scams and scamsters, and impressed on me the benefits of being able to negotiate well. So, I always spent a week or so on negotiating. But I never covered this one:
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