Tuesday, February 24, 2009

David Campbell's presentation will be on the final

Could not get it uploaded in time (took almost 8 hours to do!). It will be tested on the final.

Help wanted

Ok, I am willing to pay.

Not sure the title: FinanceProfessor assistant? (instead of Assistant FinanceProfessor...lol)

Probably about 10 hours a week. If we push it hard and get a paper out of it, you might be able to get an independent study grade out of it too.

Either way, you will learn quite a bit and should look good on your resume.

Preferred traits:
  1. Honest
  2. Self-motivated (I will not be with you 99.9% of time)
  3. Good writing skills
  4. Good spreadsheet skills.
  5. Some Website (html at minimum) skills
  6. Access to transportation
Must be available for at least 10 hours the week of finals (before graduation when grades are due) and weeks leading up to BonaResponds local weekend (April 24-26).

Ideally someone who is coming back next semester. Ideally someone who will be here for the summer.

Monday, February 23, 2009

Office Hours

I am in desperate need of a fast internet connection to upload video and audio tomorrow...so that is definitely not in my office...

So office hours will be virtual tomorrow.

Saturday, February 21, 2009

Student Expectations Seen as Causing Grade Disputes - NYTimes.com

mmm...no comment necessary

Student Expectations Seen as Causing Grade Disputes - NYTimes.com:
"I tell my classes that if they just do what they are supposed to do and meet the standard requirements, that they will earn a C,” he said. “That is the default grade. They see the default grade as an A.”

A recent study by researchers at the University of California, Irvine, found that a third of students surveyed said that they expected B’s just for attending lectures, and 40 percent said they deserved a B for completing the required reading."

Spoiled Rotten? - Careers - CFO.com

Just thought you might like to see what some employers are saying.

Today's Accounting Crop: Spoiled Rotten? - Careers - CFO.com:
"Enter the 'millennium generation' of finance and accounting professionals. Born in 1982 and later, they're high-maintenance types, requiring a great deal of hand-holding, mentoring, and immediate attention. Even after all that parental supervision, they can be incredibly fickle, choosing to stay at your company just until a better-paying, faster-growing offer comes along"
The article goes on to say how loyalty etc is gone and employees go to where they have a better offer. Which seemingly is a complain as old as business itself. But more than that, I do not even know why it is a complaint. For instance, firms will lay you off if they have down times, so taking a better offer should not be unexpected. Firms can not have it both ways. Corporate loyalty has to be earned.

Friday, February 20, 2009

Finance 402 Groups

Well that was more difficult than I thought....I tried hard to keep those who wanted to work together together but MUCH harder to keep those who did not want to work together, apart.

So the teams are:

(Team "no clue"): Team 1: Brian, Ryan, Kevin F, and Tori
(Team Park and Shop)Team 2: David, Brennan, Kevin E and Angelo
(Team BonaResponds) Team 3: Rob, Steve, Jed
(Team Friendship) Team 4: Mark, Bryan, Mike
(Team Car Ramrod)Team 5: Carl, Alex, Beth

Then using a random number generator:

On Tues (first mover advantage is that you are not held to quite as high of standard since you do not know what to expect)

  • Team 5 will be the management of B&J and argue for social responsibility
  • Team 2 will be the consultants (investment bankers) who want to maximize shareholder value (taking into account that they are REMMs and looking out for themselves as well)
On Thursday for the Nike Case (be sure to read Chapter 12: best practices as well)

  • Team 1 will be the Nike Management: your job is to convince analysts that you are under valued
  • Team 2 will be the analyst deciding whether Nike should be bought or sold
This week Team 4 will be have primary responsibility for having questions for each group.

Those groups not presenting on any given day will also be expected to have questions AND for using the rubric that was given in class to help grade the presentations skills of each group.

Thursday, February 19, 2009

FinanceTestquestions » home

As promised, a place to submit and share suggested test questions....

FinanceTestquestions » home: "
This will be a place to allow finance students....to share test questions to help students prepare for tests. (As an aside, for my classes ... if you submit a question with your name and it is used on the test, you will get 2 percent added to your test."

It is pretty easy. You just click edit.

Monday, February 16, 2009

I just checked the class feedback page....

Not very much feedback. Remember I want to know what you think the three most important things you learned in class this week. So even if everything was crystal clear, be sure to take a few seconds and fill out the form. Thanks!

Speaker on Monday February 23rd.

In addition to the normal class, next week we have a great speaker coming to the University his material will be covered on tests, so you will want to either come or listen to his remarks online afterward.

It is David Campbell. He will be speaking at 12:30 and 1:30 in the Dresser Aud.

His first talk is aimed at the wider university audience (he will be talking about Business and Service) his 1:30 lecture will be aimed at a business audience (and this is what will be tested).

from his Bio on the About-Us page at HODR.org
"David Campbell has been a technology executive, board member, investment banker, and humanitarian field volunteer. He went to Thailand immediately after the tsunami, and became one of the founders of HandsOnThailand.org, which brought over 200 volunteers and several hundred thousand dollars to assist the rebuilding of five Phuket fishing villages.

After hurricane Katrina hit the Gulf Coast David joined with several other HandsOn volunteers to establish Hands On USA, and after one week on site the team had an operations center in Biloxi, MS, 50 volunteers committed and en route, and dozens of projects launched. In total over 1,500 volunteers helped HandsOnUSA serve the victims of Katrina.

In 2006 this volunteer response model became known as Hands On Disaster Response, and dealt with international events;
-an earthquake near Jogjakarta, Indonesia in summer, 2006
-the Fall typhoon, Durian, that caused extensive damage in the Philippines.
-in 2007 an expanded HODR responded to the Pisco, Peru earthquake. Over 550 volunteers from 30 different countries answered the call
-While Peru was still in full swing typhoon Sidr hit Bangladesh, and HODR operated simultaneous projects for the first time.
- Summer of 2008 saw a major assessment of the Sichuan, China earthquake, but a decision was made not to deploy due to lack of government approval for access. The extensive flooding occurring in the US Midwest led to a 4 month deployment... in Iowa.
- 2009 opened with a HODR project in Gonaives, Haiti, which will bring over 100 volunteers to assist in a variety of projects, including mud removal, well reclamation, and a variety of distribution tasks.

David's 40 year business background includes positions as President of BBN Technologies of Cambridge, and of GTE Labs in Waltham, as well as CEO responsibilities at public companies Computer Task Group of Buffalo and Xpedior of Chicago. Mr Campbell is currently a Managing Director of Innovation Advisors, an investment banking firm.

Mr Campbell has also served as a member of the Board of Directors of Tektronix, M&T Bank, MRO Software, Gibraltar Industries, and PowerSteering software, and Niagara University and SUNY-Buffalo, as well as civic positions including Chairman of Roswell Park Cancer Institute Council, the Buffalo United Way campaign, and the Erie County IDA and Chamber.

Recognitions include an honorary doctorate from Niagara University, citizen of the year from The Buffalo News, and inclusion as a Fellow in the first year awards of the Purpose Prize.

He is a great speaker and you will definitely want to be there! (Btw here is a link to his talk in Buffalo, the video quality is bad, but the audio is well worth it!


Students invest cash for Western Michigan University | Freep.com | Detroit Free Press

Close circuited for SIMM:

Students invest cash for Western Michigan University | Freep.com | Detroit Free Press: "
The 15 students in Len Harrison's Finance 4980 class in January were handed $500,000 of the roughly $200-million Western Michigan University Foundation endowment to invest.

It's the first time WMU has entrusted students with endowment funds.

Over three semesters, they will make real decisions in investing real money in hopes of preparing them for real careers. Harrison of LVM Capital in Portage said they are tentative: 'They'll come in and say, 'This is what the analysts' reports say,' and I have to remind them, 'No, you're the analysts now.' '"
And at Michigan State:
"Since 2003, Michigan State University students have invested about $3 million in endowment money that supports research. The student-run domestic-equities fund outperforms similar funds in the foundation's portfolio, said Jim Wiggins, associate professor of finance at MSU"

Wednesday, February 11, 2009

MBA 610 Class 4 after break Market Efficiency

Market Efficiency introduction

MBA 610 Class 4 Before Break

After a look at current events, we review CAPM, discuss anomalies, leading up to Market Efficiency

Not reading the text before class? Maybe these will help

I realize many of you are very busy and also that you have other demands on your time, but I do want to remind everyone that class is designed to supplement the reading of the text/notes online. It seems like some of you are coming to class not having read the material.

Consequently some of the vocabulary and ideas discussed in class may seem a bit foreign. In that spirit I offer you the following videos. They are not as good as the textbook, but people learn in different ways and maybe this is your way. Additionally some of them (especially the material from Bionic Turtle is flat out excellent) are very good.

Enjoy and have fun with them!

YouTube - savingandinvesting's Channel

And a little more technical lessons from Bionic Turtle.

The stuff from BionicTurtle is HIGHLY recommended. I just spent probably an hour just watching them myself. And while some or the "art" of finance is missing in that you still need to see the big picture etc (whole idea of not just using a model blindly), the material is really good!!

Tuesday, February 10, 2009

The Extraordinary Classroom Series

Well my one 610 class can't go, but to everyone else, if you are not doing anything, this should be interesting (yes even if it is accounting!). If anyone wants to go and record it for the 610 class can see it let me know. I will give you a flip recorder to use.

The Extraordinary Classroom Series:
"Dr. Carol Fischer and Dr. Joe Coate School of Business; Department of Accounting Earnings Management and Corporate Social Responsibility: An In-Class Exercise to Illustrate the Short Term and Long Term Consequences Wednesday, Feb. 11, 3 p.m., Robert R. Jones Board of Trustees Room, Doyle Hall"

Monday, February 09, 2009

Payoff from the online feedback form

From a student input on the online feedback form:

"Please provide some sample problems/questions we can use to test our knowledge. I realize that may be a little juvenile to request, but in discussing with classmates it would seem that most have that same concern that we may be overestimating our understanding of the material. We do not want graded homework..."

You asked, so here you go:
  1. What are some of the assumptions behind CAPM? How well are they met? How might they matter?
  2. Be able to state current state of CAPM.
  3. Why do we study CAPM given it is probably wrong?
  4. What is significance of the Fama-French three factor model?
  5. Why are assumptions more important in valuing longer term assets?
  6. Graph the long term historical relationship between risk and return of different financial assets?
  7. What is Yield to Maturity? How do you calculate it?
  8. Be able to calculate duration and modified duration.
  9. What inputs change the duration of a fixed income asset. How? For instance, two bonds, equal maturity and both selling for par. One is rated AA and one is rated BA. Which probably has a longer duration and why? (hint higher coupon, shorter duration ceteris paribus)
  10. What is a perpetuity? Annuity?
  11. How does one get from Sensitivity Analysis to Scenario analysis? What is the difference between each?
  12. What is the price of a 5 year bond that pays a semiannual coupon payments, 4% coupon bond if market interest rates are 5% and pay value is $1000. Answer: $956
  13. What does a tornado diagram do?
  14. A callable bond gives the _______ the right to ______ at certain points of time.
  15. The main rationale for callable debt is???
  16. Bond investors would prefer _____ debt. (non callable)
  17. The manager-shareholder conflict is often called an ________ problem. (agency cost)
  18. Why is capital budgeting and valuation essentially the same thing? (Think of valuation as capital budgeting with zero cost, or both use present value of DCF).
  19. What can ratios do? What can they not do? How can ratios be used internally and externally?
  20. Give examples of stakeholder conflicts
  21. Why are shareholders so important?

Assessment test update

Just to confirm what I said in class on Thursday (Fin 402), you are not allowed cheat sheets for the assessment test.

MBA Class 3 Before Break

A long look at recent articles of class interest, a review of Valuation and then onto portfolio math-

I previously had posted the file from after break twice by mistake. Sorry for any inconvenience.

Sunday, February 08, 2009

MBA 610 Class 3 after break

More of the same class. Porftfolio math, CAPM, some of Fama-French three factor model

MBA 610 Class 3- review of valuation w discount rate focus

Class started with a fairly long review of articles and current events tied to class. Then reviewed some student questions and looked at historic returns before going over portfolio math.

Tuesday, February 03, 2009

SSRN-We Don't Quite Know What We are Talking About When We Talk About Volatility by Daniel Goldstein, Nassim Taleb

Here is the paper we mentioned in SIMM class today

SSRN-We Don't Quite Know What We are Talking About When We Talk About Volatility by Daniel Goldstein, Nassim Taleb:
"Finance professionals, who are regularly exposed to notions of volatility, seem to confuse mean absolute deviation with standard deviation, causing an underestimation of 25% with theoretical Gaussian variables. In some fat tailed markets the underestimation can be up to 90%. The mental substitution of the two measures is consequential for decision making and the perception of market variability."