The Role of Investment Philosophy In Evaluating Investment Managers
|
|
- Elfrieda Oliver
- 5 years ago
- Views:
Transcription
1 The Role of Investment Philosophy In Evaluating Investment Managers A Consultant s Reflection on Attempting to Distinguish Alpha from Noise Presented to QWAFAFEW by John R. Minahan, CFA Director of Research NEPC January 17, 2006
2 Contents Why Is Investment Philosophy Important? What Is An Investment Philosophy? Using Investment Philosophy to Evaluate Managers The Investment Philosophy Test Common Ways of Failing Uncommon Ways of Passing Concluding Thoughts 2
3 Why Is Investment Philosophy Important? Investment Returns Have a Substantial Random Element Realized (ex-post) alpha = ex-ante alpha plus noise A consultant is charged with finding managers with ex-ante alpha Difficult to tell if good performance is due to ex-ante alpha or noise Hence, the logic of the investment process is central Alpha-generators versus Alpha-pretenders Generating ex-ante alpha is secondary consideration for some managers These managers exploit the fact that randomness will sometimes cause good returns This can be successful business strategy because it is difficult for investors to distinguish alpha from noise Yet Not All Managers Are Pretenders How can one use the concept of investment philosophy to differentiate alpha from noise? 3
4 Why Is Investment Philosophy Important? In One Sense, Active Management Is Simple Discount cash flows to get present value Buy if price is below value, sell if vice-versa Hardly a philosophical endeavor But Failure Breeds Introspection No one knows what the cash flows of a risky asset will be No one knows what the right discount rate is Market prices tend to reflect information and points of view as they are traded upon This Reframes the Problem: Why has the market not yet discounted the manager s perspective? What is the manager s competitive advantage at finding and exploiting mispricings? How does the manager avoid the winner s curse? (the tendency in auction markets for the winner to have the largest overestimate of value.) 4
5 What Is An Investment Philosophy? Definition: an investment philosophy is: A set of beliefs regarding the security pricing mechanism and what it is about that mechanism which affords the opportunity to add value A set of beliefs about the manager s competitive advantage in exploiting these opportunities A thesis about how these beliefs can be exploited to generate alpha (an alpha-thesis ) What is a good investment philosophy? Knows where it stands with respect to capital market theory Knows where it stands with respect to evidence Is living: it constantly wrestles with confirmation and disconfirmation, and adapts as necessary Has deep enough core principles that adaptation does not result in total change 5
6 Using Investment Philosophy to Evaluate Managers The concept of a good investment philosophy suggests a set of questions on which an evaluator should focus: What is thesis of how the product generates alpha? What is the conceptual basis of the alpha-thesis? What is the relationship of the alpha-thesis to capital market theory? What is the evidence that that alpha was generated by the valuethesis and not a mismatched benchmark or luck? If evidence is lacking, how does the manager convince himself that the thesis is well-grounded? What is the manager s competitive advantage in executing the thesis? How does the manager think about the possible need for the valuethesis to change over time? 6
7 Common Ways of Failing the Philosophy Test Not Having an Alpha-thesis Many managers never offer an argument about why their process should be expected to outperform Having an Alpha-thesis That Isn t Conceptually Grounded In the long run X always wins Data helps, but isn t enough Sometimes the data doesn t connect with the thesis Not Giving a Lot of Thought to Where Performance Comes From Good performance does not speak for itself The manager has more at stake than anyone in knowing where their performance comes from Not Thinking about the Possible Need for the Alpha-thesis to Change Might the underlying cause of the alpha-opportunity change over time? Currency example 7
8 Uncommon Ways of Passing the Philosophy Test Measuring the Success of the Steps of the Process Value-added of different stages of the funnel Upgrade/downgrade example Recognizing that Alpha-opportunities Decay with Time E.g. quant managers that measure the value-added of every signal and consider there competitive advantage to be the ongoing discovery of new signals Identifying the Specific Inefficiencies Exploited Many managers state they exploit inefficiencies, but few can tell you the specific inefficiency they exploit The Exception that Proves the Rule Sometimes a manager just has talent and can t articulate why his or her approach works 8
9 Concluding Thoughts The Investment Philosophy Concept Is Underused Consultants can t get good answers, and don t press the point Managers don t invest in developing good answers, because consultants don t press the point The norm is to use pretend investment philosophies for marketing This Does Not Serve the Interests of Clients, Consultants, or Alpha-generators Only alpha-pretenders benefit How did we let the pretenders get the upper hand? Alpha-generators Can Distinguish Themselves by Developing Answers to the Investment Philosophy Test It is hard for alpha-pretenders to come up with credible answers Consultants Need to Press Managers More But should be open to finding exceptions to the rule 9
EXAMPLE OF FAILURE OF EQUILIBRIUM Akerlof's market for lemons (P-R pp )
ECO 300 Fall 2005 December 1 ASYMMETRIC INFORMATION PART 2 ADVERSE SELECTION EXAMPLE OF FAILURE OF EQUILIBRIUM Akerlof's market for lemons (P-R pp. 614-6) Private used car market Car may be worth anywhere
More informationChapter 13. Efficient Capital Markets and Behavioral Challenges
Chapter 13 Efficient Capital Markets and Behavioral Challenges Articulate the importance of capital market efficiency Define the three forms of efficiency Know the empirical tests of market efficiency
More informationFinding outperforming managers
Finding outperforming managers Randolph B. Cohen MIT Sloan School of Management 1 Money Management Skeptics hold that: Managers can t pick stocks and therefore don t beat the market It s impossible to
More informationFinancial Markets and Institutions Midterm study guide Jon Faust Spring 2014
180.266 Financial Markets and Institutions Midterm study guide Jon Faust Spring 2014 The exam will have some questions involving definitions and some involving basic real world quantities. These will be
More informationWESTMINSTER CONSULTING. The Death of Active Management
WESTMINSTER CONSULTING The Death of Active Management The reports of my death have been greatly exaggerated. - Mark Twain Broadly speaking, there are two schools of thought for investment managers: active
More informationQ. How has your thinking on investment management and wealth. When I started 10 years ago, the focus was almost totally on investments
Bennet Thonakkara, CFA, CPA comes from a family that spent years teaching in India, Kenya and South Africa. Eventually, after Bennet graduated from college, the whole family moved to Connecticut. He began
More information15 Week 5b Mutual Funds
15 Week 5b Mutual Funds 15.1 Background 1. It would be natural, and completely sensible, (and good marketing for MBA programs) if funds outperform darts! Pros outperform in any other field. 2. Except for...
More informationKey Concepts and Skills
Chapter 14 Dividends and Dividend Policy Key Concepts and Skills Understand dividend types and how they are paid Understand the issues surrounding dividend policy decisions Understand the difference between
More informationIndependent Private Value Auctions
John Nachbar April 16, 214 ndependent Private Value Auctions The following notes are based on the treatment in Krishna (29); see also Milgrom (24). focus on only the simplest auction environments. Consider
More informationTHE NASDAQ-100 SIGNALS
THE NASDAQ-100 SIGNALS The NASDAQ-100 timing signals use a mix of traditional and proprietary technical analysis to create computerized Buy (Up) and Sell (Down) signals for the future direction of the
More informationSix key topics nonprofit organizations should consider in 2018
Six key topics nonprofit organizations should consider in 2018 Nonprofit organizations operate in a complex and evolving financial world. As one of the world s largest investment managers, Vanguard has
More informationDerivative Instruments
Derivative Instruments Paris Dauphine University - Master I.E.F. (272) Autumn 2016 Jérôme MATHIS jerome.mathis@dauphine.fr (object: IEF272) http://jerome.mathis.free.fr/ief272 Slides on book: John C. Hull,
More informationAuctions. Agenda. Definition. Syllabus: Mansfield, chapter 15 Jehle, chapter 9
Auctions Syllabus: Mansfield, chapter 15 Jehle, chapter 9 1 Agenda Types of auctions Bidding behavior Buyer s maximization problem Seller s maximization problem Introducing risk aversion Winner s curse
More informationInternational Money and Banking: 3. Liquidity and Solvency
International Money and Banking: 3. Liquidity and Solvency Karl Whelan School of Economics, UCD Spring 2018 Karl Whelan (UCD) Liquidity and Solvency Spring 2018 1 / 17 Liquidity and Solvency: Definition
More informationThe Fallacy of Large Numbers
The Fallacy of Large umbers Philip H. Dybvig Washington University in Saint Louis First Draft: March 0, 2003 This Draft: ovember 6, 2003 ABSTRACT Traditional mean-variance calculations tell us that the
More informationThe benefits of core-satellite investing
The benefits of core-satellite investing Contents 1 Core-satellite: A powerful investment approach 3 The key benefits of indexing the portfolio s core 6 Core-satellite methodology Core-satellite: A powerful
More informationPerformance Measurement and Attribution in Asset Management
Performance Measurement and Attribution in Asset Management Prof. Massimo Guidolin Portfolio Management Second Term 2019 Outline and objectives The problem of isolating skill from luck Simple risk-adjusted
More informationChapter 8 Stock Price Behavior and Market Efficiency
Chapter 8 Stock Price Behavior and Market Efficiency Concept Questions 1. There are three trends at all times, the primary, secondary, and tertiary trends. For a market timer, the secondary, or short-run
More informationStock Market Fluctuations
Stock Market Fluctuations Trevor Gallen Spring, 2016 1 / 54 Introduction Households: Want to be able to save Want higher interest rates (risk held constant) Want their funds to be liquid Firms Want to
More informationActive or passive? Tips for building a portfolio
Active or passive? Tips for building a portfolio Jim Nelson: Actively managed funds or passive index funds? It s a common question that many investors and their advisors confront during portfolio construction.
More informationECON 459 Game Theory. Lecture Notes Auctions. Luca Anderlini Spring 2017
ECON 459 Game Theory Lecture Notes Auctions Luca Anderlini Spring 2017 These notes have been used and commented on before. If you can still spot any errors or have any suggestions for improvement, please
More informationspecial report 24 PROFESSIONAL PLANNER Gian Pandit and Ella Brown Photo by : Matthew Fatches,
Photo by : Matthew Fatches, www.mattfatches.com.au Gian Pandit and Ella Brown 24 PROFESSIONAL PLANNER Courage of conviction There is a growing sense that the time to move back into equities is drawing
More informationOur Approach to Equity Investing
OCTOBER 2015, ISSUE 2 Our Approach to Equity Investing The ongoing debate between active versus passive management (also called indexing ) in the context of equity investing may never be fully resolved.
More informationDividends True Contribution to Total Return May Surprise You
Dividends True Contribution to Total Return May Surprise You March 30, 2016 by Chuck Carnevale of F.A.S.T. Graphs Introduction In recent years, dividends contribution to total return has been one of the
More informationBehind the Private Equity Wheel. How Investors Can Use Data to Improve Their PE Manager Selection Process
Behind the Private Equity Wheel How Investors Can Use Data to Improve Their PE Manager Selection Process 1 Deciding which private equity managers to invest with is remarkably similar to the process of
More informationInvestment Objectives and Operations in the Context of Deposit Insurance Funds
Investment Objectives and Operations in the Context of Deposit Insurance Funds Dean A. Cosman, Vice-President, Finance and Administration & CFO Canada Deposit Insurance Corporation Investment Management
More informationLecture 5. Trading With Portfolios. 5.1 Portfolio. How Can I Sell Something I Don t Own?
Lecture 5 Trading With Portfolios How Can I Sell Something I Don t Own? Often market participants will wish to take negative positions in the stock price, that is to say they will look to profit when the
More informationCUR 412: Game Theory and its Applications, Lecture 4
CUR 412: Game Theory and its Applications, Lecture 4 Prof. Ronaldo CARPIO March 27, 2015 Homework #1 Homework #1 will be due at the end of class today. Please check the website later today for the solutions
More informationInternet Trading Mechanisms and Rational Expectations
Internet Trading Mechanisms and Rational Expectations Michael Peters and Sergei Severinov University of Toronto and Duke University First Version -Feb 03 April 1, 2003 Abstract This paper studies an internet
More informationRecap First-Price Revenue Equivalence Optimal Auctions. Auction Theory II. Lecture 19. Auction Theory II Lecture 19, Slide 1
Auction Theory II Lecture 19 Auction Theory II Lecture 19, Slide 1 Lecture Overview 1 Recap 2 First-Price Auctions 3 Revenue Equivalence 4 Optimal Auctions Auction Theory II Lecture 19, Slide 2 Motivation
More informationHow Co-Investments Round Out PE's Virtuous Cycle Brendon Parry, January 2018
How Co-Investments Round Out PE's Virtuous Cycle Brendon Parry, January 2018 TIFF has a long history of making opportunistic private investments. The label can easily be misunderstood. To some, opportunistic
More informationLuck versus Skill... John H. Cochrane and Tobias J. Moskowitz
... John H. Cochrane and Tobias J. Moskowitz We include one paper on performance evaluation, Luck versus Skill in the Cross- Section of Mutual Fund Returns, written with Ken French. Gene s 1970 essay introduced
More informationThe Fiscal Theory of the Price Level
The Fiscal Theory of the Price Level 1. Sargent and Wallace s (SW) article, Some Unpleasant Monetarist Arithmetic This paper first put forth the idea of the fiscal theory of the price level, a radical
More informationSelecting the Managers: Research and Due Diligence
Selecting the Managers: Research and Due Diligence January 2014 Scott Lavelle, CFA, FRM, CAIA Director of Investment Advisor Research Introduction Having choices can be good. Having too many choices can
More information3.36pt. Karl Whelan (UCD) Term Structure of Interest Rates Spring / 36
3.36pt Karl Whelan (UCD) Term Structure of Interest Rates Spring 2018 1 / 36 International Money and Banking: 12. The Term Structure of Interest Rates Karl Whelan School of Economics, UCD Spring 2018 Karl
More informationTopics in Contract Theory Lecture 6. Separation of Ownership and Control
Leonardo Felli 16 January, 2002 Topics in Contract Theory Lecture 6 Separation of Ownership and Control The definition of ownership considered is limited to an environment in which the whole ownership
More informationFall 2013 Volume 19 Number 3 The Voices of Influence iijournals.com
Fall 2013 Volume 19 Number 3 www.iijsf.com The Voices of Influence iijournals.com How to Value CLO Managers: Tell Me Who Your Manager Is, I ll Tell You How Your CLO Will Do SERHAN SECMEN AND BATUR BICER
More informationWhy Invest Internationally?
Why Invest Internationally? Insights from: Investing solely in U.S. companies may limit an investor s opportunity set and prevent them from reaping the potential rewards of holding a well-diversified portfolio.
More informationUnit 4.3: Uncertainty
Unit 4.: Uncertainty Michael Malcolm June 8, 20 Up until now, we have been considering consumer choice problems where the consumer chooses over outcomes that are known. However, many choices in economics
More informationPROBLEM SET 6 ANSWERS
PROBLEM SET 6 ANSWERS 6 November 2006. Problems.,.4,.6, 3.... Is Lower Ability Better? Change Education I so that the two possible worker abilities are a {, 4}. (a) What are the equilibria of this game?
More informationModels of Asset Pricing
appendix1 to chapter 5 Models of Asset Pricing In Chapter 4, we saw that the return on an asset (such as a bond) measures how much we gain from holding that asset. When we make a decision to buy an asset,
More informationECON Microeconomics II IRYNA DUDNYK. Auctions.
Auctions. What is an auction? When and whhy do we need auctions? Auction is a mechanism of allocating a particular object at a certain price. Allocating part concerns who will get the object and the price
More informationResponses to Otelco Shareholder Comments
Responses to Otelco Shareholder Comments As indicated in the report of Otelco shareholder views offered in the survey conducted last month, 1 the comments and questions that you offered for the company
More informationWhat Influences Investor Decisions and Behaviors?
What Influences Investor Decisions and Behaviors? by Lewis Mandell, Ph.D. Professor of Finance and Dean Emeritus State University of New York at Buffalo In a world where financial products grow increasingly
More informationw E(Q w) w/100 E(Q w) w/
14.03 Fall 2000 Problem Set 7 Solutions Theory: 1. If used cars sell for $1,000 and non-defective cars have a value of $6,000, then all cars in the used market must be defective. Hence the value of a defective
More informationEfficiency in auctions with crossholdings
Efficiency in auctions with crossholdings David Ettinger August 2002 Abstract We study the impact of crossholdings on the efficiency of the standard auction formats. If both bidders with crossholdings
More informationForex Illusions - 6 Illusions You Need to See Through to Win
Forex Illusions - 6 Illusions You Need to See Through to Win See the Reality & Forex Trading Success can Be Yours! The myth of Forex trading is one which the public believes and they lose and its a whopping
More informationLife isn t binary. Neither is your portfolio. Strategic beta bridges the gap between active and passive, but one size does not fit all.
Life isn t binary. Neither is your portfolio. Strategic beta bridges the gap between active and passive, but one size does not fit all. 1 VictoryShares smart beta, dumb name Strategic beta often called
More informationLinear functions Increasing Linear Functions. Decreasing Linear Functions
3.5 Increasing, Decreasing, Max, and Min So far we have been describing graphs using quantitative information. That s just a fancy way to say that we ve been using numbers. Specifically, we have described
More informationETFs vs Single Stocks
ETFs vs Single Stocks Comparing alpha extraction in ETFs vs individual stocks Gaurav Chakravorty CIO at qplum www.qplum.co/events Disclosures: qplum LLC is a registered investment adviser. Information
More informationProf. Bryan Caplan Econ 812
Prof. Bryan Caplan bcaplan@gmu.edu http://www.bcaplan.com Econ 812 Week 9: Asymmetric Information I. Moral Hazard A. In the real world, everyone is not equally in the dark. In every situation, some people
More informationEFFICIENT MARKETS HYPOTHESIS
EFFICIENT MARKETS HYPOTHESIS when economists speak of capital markets as being efficient, they usually consider asset prices and returns as being determined as the outcome of supply and demand in a competitive
More informationHow I Make Money In the Stock Market.
How I Make Money In the Stock Market ivo@ivanhoff.com First of all There should be a clear distinction between trading and investing. What is the difference between trading and investing? Long- term investing
More informationECON DISCUSSION NOTES ON CONTRACT LAW. Contracts. I.1 Bargain Theory. I.2 Damages Part 1. I.3 Reliance
ECON 522 - DISCUSSION NOTES ON CONTRACT LAW I Contracts When we were studying property law we were looking at situations in which the exchange of goods/services takes place at the time of trade, but sometimes
More informationThe Fallacy of Large Numbers and A Defense of Diversified Active Managers
The Fallacy of Large umbers and A Defense of Diversified Active Managers Philip H. Dybvig Washington University in Saint Louis First Draft: March 0, 2003 This Draft: March 27, 2003 ABSTRACT Traditional
More information10. Dealers: Liquid Security Markets
10. Dealers: Liquid Security Markets I said last time that the focus of the next section of the course will be on how different financial institutions make liquid markets that resolve the differences between
More informationDown for the Count ACADEMIC RESEARCH. Market Performance May Benefit From Leaving Intangibles Unmeasured
ACADEMIC RESEARCH Down for the Count Market Performance May Benefit From Leaving Intangibles Unmeasured BY CHANDRA KANODIA, PH.D. Professor CARLSON SCHOOL OF MANAGEMENT UNIVERSITY OF MINNESOTA AND HARESH
More informationSocial Network Analysis
Lecture IV Auctions Kyumars Sheykh Esmaili Where Are Auctions Appropriate? Where sellers do not have a good estimate of the buyers true values for an item, and where buyers do not know each other s values
More informationDisciplined Alpha: Building Consistent Alpha, Bond by Bond
MANAGER INSIGHT Disciplined Alpha: Building Consistent Alpha, Bond by Bond By Lynne Royer, Head of the Loomis Sayles Disciplined Alpha Fixed Income Team and William Stevens KEY TAKEAWAYS The Disciplined
More informationCHAPTER 17 INVESTMENT MANAGEMENT. by Alistair Byrne, PhD, CFA
CHAPTER 17 INVESTMENT MANAGEMENT by Alistair Byrne, PhD, CFA LEARNING OUTCOMES After completing this chapter, you should be able to do the following: a Describe systematic risk and specific risk; b Describe
More informationActive vs. Passive Money Management
Active vs. Passive Money Management Exploring the costs and benefits of two alternative investment approaches By Baird s Advisory Services Research Synopsis Proponents of active and passive investment
More informationAll Ords Consecutive Returns over a 130 year period
Absolute conviction, at what price? Peter Constable, Chief Investment Offier, MMC Asset Management Summary When equity markets start generating returns significantly above long term averages, risk has
More informationMA300.2 Game Theory 2005, LSE
MA300.2 Game Theory 2005, LSE Answers to Problem Set 2 [1] (a) This is standard (we have even done it in class). The one-shot Cournot outputs can be computed to be A/3, while the payoff to each firm can
More informationCorporate Finance, Module 21: Option Valuation. Practice Problems. (The attached PDF file has better formatting.) Updated: July 7, 2005
Corporate Finance, Module 21: Option Valuation Practice Problems (The attached PDF file has better formatting.) Updated: July 7, 2005 {This posting has more information than is needed for the corporate
More informationINVESTMENTS Lecture 1: Background
Philip H. Dybvig Washington University in Saint Louis the players the assets security returns mean and variance of returns INVESTMENTS Lecture 1: Background Copyright c Philip H. Dybvig 1996, 2000 Some
More informationFinding High-Quality Companies Today
Finding High-Quality Companies Today June 12, 2017 by Vitaliy Katsenelson, CFA Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor
More informationActive vs. Passive Money Management
Active vs. Passive Money Management Exploring the costs and benefits of two alternative investment approaches By Baird s Advisory Services Research Synopsis Proponents of active and passive investment
More informationCapital Asset Pricing Model - CAPM
Capital Asset Pricing Model - CAPM The capital asset pricing model (CAPM) is a model that describes the relationship between systematic risk and expected return for assets, particularly stocks. CAPM is
More informationBuy The Complete Version of This Book at Booklocker.com:
Learn to spot opportunities early and make huge profits fast How To Make Quick Profits From The Falling Stocks Buy The Complete Version of This Book at Booklocker.com: http://www.booklocker.com/p/books/3619.html?s=pdf
More informationExit Strategies for Stocks and Futures
Exit Strategies for Stocks and Futures Presented by Charles LeBeau E-mail clebeau2@cox.net or visit the LeBeau web site at www.traderclub.com Disclaimer Each speaker at the TradeStationWorld Conference
More informationThe Case For and Against Active Investment Management
The Case For and Against Active Investment Management By Dr. Robert C. Smithson Anava Capital Management LLC Cupertino, CA 408-918-9333 Please Note: Individual companies shown or discussed in this presentation
More informationVALUE-INVESTING IN GERMAN EQUITIES
2 VALUE-INVESTING IN GERMAN EQUITIES PREFACE We live in a time when it is a great challenge to invest wealth profitably in the long term. That s why we at FPM Frankfurt Performance Management AG have been
More informationFN428 : Investment Banking. Lecture : Dividend Policy
FN428 : Investment Banking Lecture : Dividend Policy Dividend Policy : The Questions Profitable companies regularly face three important questions: (1) How much of our free cash flow should we pass on
More informationPAPER No.14 : Security Analysis and Portfolio Management MODULE No.24 : Efficient market hypothesis: Weak, semi strong and strong market)
Subject Paper No and Title Module No and Title Module Tag 14. Security Analysis and Portfolio M24 Efficient market hypothesis: Weak, semi strong and strong market COM_P14_M24 TABLE OF CONTENTS After going
More informationStulz, Governance, Risk Management and Risk-Taking in Banks
P1.T1. Foundations of Risk Stulz, Governance, Risk Management and Risk-Taking in Banks Bionic Turtle FRM Study Notes By David Harper, CFA FRM CIPM www.bionicturtle.com Stulz, Governance, Risk Management
More informationPindyck and Rubinfeld, Chapter 17 Sections 17.1 and 17.2 Asymmetric information can cause a competitive equilibrium allocation to be inefficient.
Pindyck and Rubinfeld, Chapter 17 Sections 17.1 and 17.2 Asymmetric information can cause a competitive equilibrium allocation to be inefficient. A market has asymmetric information when some agents know
More informationChecks and Balances TV: America s #1 Source for Balanced Financial Advice
The TruTh about SOCIAL SECURITY Social Security: a simple idea that s grown out of control. Social Security is the widely known retirement safety net for the American Workforce. When it began in 1935,
More informationThe mathematical definitions are given on screen.
Text Lecture 3.3 Coherent measures of risk and back- testing Dear all, welcome back. In this class we will discuss one of the main drawbacks of Value- at- Risk, that is to say the fact that the VaR, as
More informationWhich Is the Better Valuation Metric? The P/E Ratio or the PEG Ratio: Part 1
Which Is the Better Valuation Metric? The P/E Ratio or the PEG Ratio: Part 1 October 28, 2016 by Chuck Carnevale of F.A.S.T. Graphs Introduction Recently, I have been engaged in rather intense discussions
More informationDEMAND FOR MONEY. Ch. 9 (Ch.19 in the text) ECON248: Money and Banking Ch.9 Dr. Mohammed Alwosabi
Ch. 9 (Ch.19 in the text) DEMAND FOR MONEY Individuals allocate their wealth between different kinds of assets such as a building, income earning securities, a checking account, and cash. Money is what
More informationIntroduction to Multi-Agent Programming
Introduction to Multi-Agent Programming 10. Game Theory Strategic Reasoning and Acting Alexander Kleiner and Bernhard Nebel Strategic Game A strategic game G consists of a finite set N (the set of players)
More informationWhen times are mysterious serious numbers are eager to please. Musician, Paul Simon, in the lyrics to his song When Numbers Get Serious
CASE: E-95 DATE: 03/14/01 (REV D 04/20/06) A NOTE ON VALUATION OF VENTURE CAPITAL DEALS When times are mysterious serious numbers are eager to please. Musician, Paul Simon, in the lyrics to his song When
More informationNUTS AND BOLTS OF PERFORMANCE EVALUATION AND BENCHMARKING IN THE PRIVATE REAL ESTATE ASSET CLASS
APPENDIX 26B NUTS AND BOLTS OF PERFORMANCE EVALUATION AND BENCHMARKING IN THE PRIVATE REAL ESTATE ASSET CLASS APPENDIX OUTLINE LEARNING OBJECTIVES 26B.1 After reading this appendix, you should understand:
More informationJACOBS LEVY CONCEPTS FOR PROFITABLE EQUITY INVESTING
JACOBS LEVY CONCEPTS FOR PROFITABLE EQUITY INVESTING Our investment philosophy is built upon over 30 years of groundbreaking equity research. Many of the concepts derived from that research have now become
More informationUnderstanding and Solving Societal Problems with Modeling and Simulation
Understanding and Solving Societal Problems with Modeling and Simulation Lecture 11: Conflict and War ETH Zurich May 6, 2013 Dr. Thomas Chadefaux Bargaining and Conflict The Puzzle Basic Set-Up Two parties,
More informationGrowth and Value Investing: A Complementary Approach
Growth and Value Investing: A Complementary Approach March 14, 2018 by Stephen Dover, Norman Boersma of Franklin Templeton Investments Growth and value investing are often seen as competing styles, with
More informationNetwork losses in the Swedish network regulation. Kristina Östman The Swedish Energy Markets Inspectorate
Network losses in the Swedish network regulation Kristina Östman The Swedish Energy Markets Inspectorate A regulated revenue cap The revenue cap sets the upper limit on how much the DSO or TSO is allowed
More informationMIND THE GAP : MEAN REVERSION IN LISTED AFRICAN EQUITIES
MIND THE GAP : MEAN REVERSION IN LISTED AFRICAN EQUITIES Mean reversion is the mathematical phenomenon whereby an asset s performance tends to become more average (less extreme) over time. If true, it
More informationThis affirmation is founded on my realization that accounting, today, is fraught with errors.
1 Does Warren Buffett Not Understand the Meaning of Profit? The more I specialize in the philosophy and logic of accounting, the more I realize that accounting scientists (creators of norms, resolutions,
More informationExperiments on Auctions
Experiments on Auctions Syngjoo Choi Spring, 2010 Experimental Economics (ECON3020) Auction Spring, 2010 1 / 25 Auctions An auction is a process of buying and selling commodities by taking bids and assigning
More informationDo John Hancock Funds Add Value for Investors?
Do John Hancock Funds Add Value for Investors? August 24, 2015 by Larry Swedroe My series evaluating the performance of the market s most prominent actively managed mutual fund families continues today
More informationM&A Mergers and Acquisitions. April 2011 Giuseppe Cadel
M&A Mergers and Acquisitions April 2011 Giuseppe Cadel CONTENTS M&A Basics The People Involved Preparation for the Deal s Side Preparation for the Deal s Side The Deal Process 2 M&A BASICS A Merger is
More informationMonetary Economics Efficient Markets and Alternatives. Gerald P. Dwyer Fall 2015
Monetary Economics Efficient Markets and Alternatives Gerald P. Dwyer Fall 2015 Readings This lecture, Malkiel Part 3 Next lecture, Cuthbertson, Chapter 6 Behavioral Finance Behavioral finance is not a
More informationRacial Discrimination in Mortgage Lending Is There a Problem Here?
Racial Discrimination in Mortgage Lending Is There a Problem Here? Is there racial discrimination in the mortgage lending market of America, and if so, is the problem eroding as time heals old prejudices
More informationCUR 412: Game Theory and its Applications, Lecture 4
CUR 412: Game Theory and its Applications, Lecture 4 Prof. Ronaldo CARPIO March 22, 2015 Homework #1 Homework #1 will be due at the end of class today. Please check the website later today for the solutions
More informationExchange Rate Regimes Revised: January 13, 2012
The Global Economy Class Notes Exchange Rate Regimes Revised: January 13, 2012 The term exchange rate regimes refers to the various arrangements governments around the world make about international transactions.
More informationTerminology. Organizer of a race An institution, organization or any other form of association that hosts a racing event and handles its financials.
Summary The first official insurance was signed in the year 1347 in Italy. At that time it didn t bear such meaning, but as time passed, this kind of dealing with risks became very popular, because in
More informationProblem Set #4. Econ 103. (b) Let A be the event that you get at least one head. List all the basic outcomes in A.
Problem Set #4 Econ 103 Part I Problems from the Textbook Chapter 3: 1, 3, 5, 9, 11, 13, 15, 17, 19, 21, 23, 25, 27, 29 Part II Additional Problems 1. Suppose you flip a fair coin twice. (a) List all the
More informationLifestyle Financial Planning
Lifestyle Financial Planning FINANCIAL PLANNING Our Lifestyle Financial Planning Service The Mathews Comfort Lifestyle Planning Service is available to clients seeking clarity and peace of mind about their
More informationWhat Will Happen To the Stock Market When Interest Rates Rise? Part 1
What Will Happen To the Stock Market When Interest Rates Rise? Part 1 July 21, 2016 by Chuck Carnevale of F.A.S.T. Graphs Introduction Interest rates have been in a freefall for the better part of the
More information