64 Posts found for Industry: Investment Banking

Chen, Noronha, and Singal report in a forthcoming JF article that when stocks are dropped from the S&P 500, there is a temporary price decline. However when firms are added, the increase is seemingly permanent. This asymmetry is seemingly counter to most widely held views that demand curves for individual stocks are elastic. The authors suggest that this asymmetry is due to … [ Read more ]

Content: Article | Authors: Gregory Noronha, Honghui Chen, Vijay Singal | Source: Journal of Finace (JF) | Subjects: Finance, Industry Specific | Industry: Investment Banking

Internal and external monitoring have a strong complementary (synergistic) effect. That is the finding of Cremers and Nair who show that firms with both strong internal as well as external controls tend to outperform firms without the strong controls. To test this, the authors construct various portfolios and find that those firms who measure high on both categories outperform others in the sample. … [ Read more ]

Content: Article | Authors: K.J. Martijn Cremers, Vinay B. Nair | Source: Social Science Research Network (SSRN) | Subjects: Finance, Industry Specific | Industry: Investment Banking

Why include a freeze-out provision in takeover contracts? Because if not, investors would not tender shares. How is that? Consider the Grossman-Hart (1980) view that if the takeover is in fact value maximizing, then shareholders would have an incentive to not tender their shares but to wait for the stock price to increase. Of course if shareholders knew this, then they … [ Read more ]

Content: Article | Authors: Marcel Kahan, Rangarajan K. Sundaram, Yakov Amihud | Subject: Finance | Industry: Investment Banking

Socially Responsible Investing (SRI) means different things to different people, but essentially is investing in firms that treat their employees well, care for the environment, and make products or perform services that are aligned with the goals and desires of the investors (for example, many investors may refuse to buy tobacco stocks). For as long as I can remember there has been a debate … [ Read more ]

Content: Article | Authors: Denis Dupre, Isabelle Girerd-Potin, Raghid Kassoua | Source: Social Science Research Network (SSRN) | Subjects: Finance, Industry Specific | Industry: Investment Banking

By looking carefully at data on individual stock prices, it is easy to find many examples of “comovement” – groups of stocks whose prices tend to move together. For instance, prices of stocks in the same industry tend to move together, as do the prices of small-cap stocks, value stocks, and closed-end funds.

Content: Article | Authors: Andrei Shleifer, Jeffrey Wurgler, Nicholas Barberis | Source: Capital Ideas | Subjects: Finance, Industry Specific | Industry: Investment Banking

A “share-weighting” analysis gives a better read on the market’s vital signs than major market indices.

Content: Article | Author: Craig Israelsen, Ph.D. | Source: Financial Planning | Subjects: Economics, Finance | Industry: Investment Banking

U.S. corporate scandals such as Enron and Tyco have highlighted the fact that insiders enjoy benefits above and beyond those of the average shareholder-the so-called “private benefits of control.” How widespread are these benefits? What effects do they have on the development of a country’s securities market? Furthermore, how can such benefits be curbed? New research indicates that in spite of the recent corporate scandals … [ Read more ]

Content: Article | Author: Luigi Zingales | Source: Capital Ideas | Subjects: Economics, Finance | Industry: Investment Banking

First-novelist Bronson takes on modern business in a black comedy about a group of money-crazed and eccentric bond traders in San Francisco.

Regardless of how you feel about investment banking (“It’s a complete scam!”; “It’s a great way to make a killing!”), this non-stop novelistic indictment of the shark-infested financial world–and by extension, much of the corporate world–is bound to make you laugh uproariously–and think … [ Read more ]

Content: Book | Author: Po Bronson | Subjects: Finance, Industry Specific | Industry: Investment Banking

Is earnings management always bad? No, if you believe the new paper by Arya, Glover, and Sunder. They point out that Earnings management can reduce the noise inherent in earnings and thereby reduce investor uncertainty. To quote the paper “a smooth car ride is not only comfortable, it also assures the driver of the driver’s expertise.” Moreover, too much transparency may reduce incentives of managers. … [ Read more ]

Content: Article | Authors: Anil Arya, Jonathan C. Glover, Shyam Sunder | Source: Social Science Research Network (SSRN) | Subject: Finance | Industry: Investment Banking

Jung and Shiller have an interesting paper that looks at Samuelson’s dictum: that is that the market is more efficient pricing individual stocks than getting the overall price level (i.e. the market) correct. In English it means that while we can price stocks relative to one another reasonably well, we can not price the overall market as well. [FinanceProfessor Annotation]

Content: Article | Authors: Jeeman Jung, Robert J. Shiller | Source: Social Science Research Network (SSRN) | Subjects: Economics, Finance | Industry: Investment Banking

Investors generally subscribe to the conventional wisdom that growth stocks outperform value stocks. But a study of international portfolios by professors at the University of Chicago Graduate School of Business and the Yale School of Management has shown that in reality the reverse is true: Value stocks reap higher returns than growth stocks in markets around the world.

Editor’s Note: this is an old article … [ Read more ]

Content: Article | Author: Eugene F. Fama | Source: Capital Ideas | Subjects: Economics, Finance | Industry: Investment Banking

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Although the inner workings of the stock market are fascinating, few introductory texts have the space to describe them in detail. Furthermore, the U.S. stock markets have been changing so rapidly in recent years that many books have not yet caught up with the changes. This quick note provides an up-to-date view of how the U.S. stock markets work today. This note will teach you … [ Read more ]

Content: Article | Source: Nasdaq | Subjects: Economics, Finance | Industry: Investment Banking

When the next round of finance texts is written, the American Dot-com Bubble of the late 1990s is sure to take its place with the classics – the Tulip Bubble, the South Seas Bubble, the run-up to the great crash of 1929. But what caused it? According to one theory, the problem was a shortage of short selling, say Wharton finance professors Christopher C. Geczy … [ Read more ]

Content: Article | Source: Knowledge@Wharton | Subject: Finance | Industry: Investment Banking

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How card whiz Blair Hull parlayed a $25,000 casino stake into a trading empire worth more than $500 million.

Editor’s Note: though not offering a lot of real value, this is an interesting look at the relationship between the world of gambling and investment banking.

Content: Article | Author: Michael Kaplan | Source: MBA Jungle | Subjects: Industry Specific, People | Industry: Investment Banking

How do you value an Internet company? With stormy weather now rocking the Internet world, dot-com investments are no longer the watertight bets they used to be. It now makes sense to forecast the value of the company you are thinking of investing in. Jean Dermine, INSEAD Professor of Banking and Finance and INSEAD MBA alumni K. Wildberger and H. Georgeson use this case study … [ Read more ]

Content: Case Study | Authors: H. Georgeson, Jean Dermine, K. Wildberger | Source: INSEAD | Subject: Finance | Industry: Investment Banking | Company: Egg

Here is an interactive Applet that shows a snapshot of the market by sector with color coding to indicate performance. Mouse over any square to see details of the related company and it’s stock performance. View performance for the day, the past 6 or 12 months, or YTD. Click on a company square and get quick access to more detailed info including:
… [ Read more ]

Content: Online Resource | Source: SmartMoney | Subject: Finance | Industry: Investment Banking

In this case study, Professors Pierre Hillion and Theo Vermaelen use Log On America’s decision to issue a floating-price convertible preferred stock to discuss optimal capital structure. You are asked to compare this financial innovation with alternatives such as equity financing, debt financing and convertibles with a fixed conversion price. Then you’re asked to support (or undermine) the legal case of LOA against the banks … [ Read more ]

Content: Case Study | Authors: Pierre Hillion, Theo Vermaelen | Source: INSEAD Knowledge | Subjects: Entrepreneurship, Finance | Industry: Investment Banking | Company: Log On America

Now that the window for initial public offerings has all but closed, more Wall Street-bound companies are flirting with controversial reverse mergers.

Content: Article | Author: Thea Singer | Source: Inc. Magazine | Subject: Finance | Industry: Investment Banking