FinanceProfessor.com Podcast

FinanceProfessor.com Podcast--
In case you want to listen to the class via a podcast (where you can download each file), this is the link. I will continue to also post the lectures on this (the class) blog.

MBA 610 Class 2 After Break

Nexus of Contracts, Human Nature, Agency costs, BH-SH conflicts, Ethics

MBA 610 Class 2 Spring 2009 before break

This class is a fast review of valuation and leads up to a short introduction of the Nexus of Contracts.

Review topics

Ok, you have spoken....

review topics you asked for include in Finance 402 (in no order)

* Capital Structure after Modigliani and Miller
* Derivatives--what is available, how to use them, hedging vs Speculating
* Free Cash flow estimation
* Equity Valuation
* Yield to Maturity Calculations

So we will hit on these in coming classes. thanks for the input!

Updated websites

FYI

Slight modifications have been made to both the MBA 610 and Finance 402 pages.

Thain's Furniture Will Hold its Value

Close circuit to the 401 students and in particular Kevin: Not sure if you were joking or not, but you seemingly were right, Michael Smith is good I guess....lol..

Thain's Furniture Will Hold its Value:

Bloomberg: The antiques Thain reportedly purchased will probably hold their value over time, said Clinton Howell, a New York dealer in English furniture.

“Michael Smith is a very smart guy and he buys very good things,” said Howell. “It’s very likely that what he bought was worth the money if Merrill Lynch wants to get their money back.”

MBA 610 class 1 Spring 2009

MBA 610 is a upper level graduate class at St. Bonaventure University. This is a fast review of the financial system, the time value of money, and basic bond valuation from the first class of the semester.

Free Money Finance: Seven Tips for a Better Resume

Free Money Finance: Seven Tips for a Better Resume:

"Yahoo lists seven tips for a better resume as follows:

1. Select the best format.
2. Make certain your document is error free.
3. Find a balance between wordiness and lack of detail.
4. Do not use personal pronouns.
5. Use numerical symbols for numbers.
6. Think 'accomplishments' rather than 'job duties.'
7. Keep it positive."

There is more as well as some things that Yahoo does not have. So if you are on the Job Market, definitely click through!

Free Money Finance is one of my favorite personal finance blogs. Definitely worth reading! (I think so highly of it that I get it via both MyYahoo, iGoogle, and my Google reader!)

Apple's Stock (AAPL) Cheap, Cheap, Cheap

A good example for all classes, but even better for SIMM

Apple's Stock (AAPL) Cheap, Cheap, Cheap:

"Apple generated $8.5 billion of free cash flow in fiscal 2008 (through September). Apple's enterprise value at $88 a share is about $56 billion. That's 7X trailing free cash flow."

Insider trading class discussion

from Bnet

"PETE ROSE not betting on the Reds on a particular day certainly told other bettors, bookies, etc. that something was not right with the Reds that day (due to an injury or whatever). That is terrible! His silence was tantamount to insider trading. We all know how many hits Pete had, but I wonder how many "hits" were made by gamblers because of Pete's inside knowledge"

and then my personal favorite from a couple years ago. WOW!

"You have to read this! It has everything any insider trading case could want---from a retired seamstress, to classified ads placed to hire accomplices, to the theft of advance copies of BusinessWeek, to strippers, to Russian baths. (I am not making this up!)"

Finance 401 project

Due to a conflict with the Finance 401 exam, the term paper will be due Dec 3rd.

Jeremy Siegel's Mistake: Why Stocks Are NOT "Dirt Cheap"

Jeremy Siegel's Mistake: Why Stocks Are NOT "Dirt Cheap":

"The 15X average PE for the S&P 500 is what you get when you use professor Shiller's methodology, which averages 10 years of trailing earnings (and, therefore, if profit margins are normal, uses earnings of about 4 years ago). Prof Siegel's earnings estimate, meanwhile, is a forward estimate--one that adds about 5 years of trended growth (6% a year) to the Shiller estimate, but uses the same PE.

We suspect that, if Prof Siegel performed the same 'trended' analysis over the entire 20th Century, the average PE for forward trended earnings would be about 11X-12X, not 15X. This, we expect, would produce a fair value estimate much closer to that of Shiller, Grantham, Smithers, et al."

Given our class discussion on ratios and using multiples to value equities, this one is a must read for all classes! (yes click through to the article)

This will allow me to

This will allow me to update blog by phone in event of class cancellation etc.

SIMM Calendar

Test answers

Sorry for the delay...forgot yesterday..

1) C

2) E

3) D

4) E

5) D

6) C

7) D

8) E

9) E

10) A

11) D

12) C

13) B

14) E

15) A,B,C,D,E

16) E

17) A

18) B

19) B

20) E

21) D

22) B

23) B

24) A

25) D

26) C

27) C

28) D

29) B

30) E

31) D

32) D

33) E

34) D

35) E

36) A

37) B

38) C

39) D

40) E

41) E

42) C

43) E

44) D

45) B

46) E

47) C

48) C

49) B

50) E

51) B

52) D

53) D

54) E

55) D

56) C

57) A

58) C

59) D

60) D

61) C

62) C

63) C

64) C

65) B

66) E

67) D

68) D

69) C

70) C

71) E

72) E

73) C

74) B

75) E

Finance Students Keep Their Job Hopes Alive - NYTimes.com

Finance Students Keep Their Job Hopes Alive - NYTimes.com:

"Financial companies shed 150,000 jobs last year and more than 100,000 so far this year, according to Challenger, Gray & Christmas, a national job placement company. Yet amid the downturn, applications to graduate business schools rose this year, as they have in other periods of uncertainty."

Anxious time for finance majors

Anxious time for finance majors:

"CLEVELAND -- With the meltdown on Wall Street, many finance majors are worried about whether they can find jobs when they graduate.

'I have at least one more year of college, so I hope it will get better, hopefully,' says Seth Woolfe, a CSU finance junior.

It may be harder to find internships for college students, especially paid internships.

'Before you might have had three job offers when you graduated, now you may have to settle for a satisfactory job, not your dream job,' says Alan Reichert, a CSU Finance Professor.

Finance is the second most popular major in the College of Business at CSU. There are about 300 finance majors."

Markets crimp plans of would-be investment bankers - The Boston Globe

Markets crimp plans of would-be investment bankers - The Boston Globe:

"There are still opportunities in finance,' said Bakewell, who ended up taking the summer spot under JPMorgan Chase. 'You can't just change your whole career path. I can't imagine trying to do a complete 180 just based on recent events.'

There were a few more jangled nerves in the immediate aftermath of the September turmoil that toppled the remaining independent investment banks. Faculty and administrators at numerous business schools describe their second-year MBA students in particular as stunned or even panicked initially.

Students are starting to accept the new reality, school officials say, although many are reviewing their options and looking at smaller firms in different areas or even at different fields."

IBM

I have had several past students mention (ok, so two) that this is a good opportunity...be sure to check it out...from notice board:

Interested in working for IBM?

If so, plan to attend the IBM information session presented by Kathleen Colucci, SBU alumna and IBM vice-president, finance.

When: Thursday, Oct. 2 from 4 – 5 p.m.
Where: Reilly Center, Rm. 219

IBM has full-time corporate financial planning opportunities for candidates earning degrees in finance, accounting, or business.

Connie Whitcomb

Some valuation resources

In finance 401 we are doing valuation and I have mentioned SIMM several times. Here are some resources you might find useful in your valuations. Students in Money Management Resources