SIMM esq

www.belleville.com | 05/05/2007 | Finance students cut teeth as portfolio managers: "

...student-run portfolio programs provide in-depth investment nitty-gritty aimed primarily at finance majors and Master of Business Administration students. While students are applying what they've learned from textbook theory, the programs also help them develop presentation and communication skills that could pay off with jobs in the financial industry."

I will be teaching SIMM (the SBU student run fund) this coming year. Here is the new website for it thanks to Wren and Chris (and others?)

Study: Your brain shrinks if you drink too much alcohol for a prolonged period - On Deadline - USATODAY.com

Study: Your brain shrinks if you drink too much alcohol for a prolonged period - On Deadline - USATODAY.com:

"New research suggests that people who drink a lot of alcohol over a long period of time tend to have smaller brains.

Here's how the neurologist who performed the study described her findings: This cross-sectional study found people who had more than 14 drinks per week had an average 1.6 percent reduction in the ratio of brain volume to skull size compared to people who didn't drink."

Need another reason to avoid excessive drinking?

What Is Open Source

Here is a description of open source that we were talking about in class (401) today:

ONLamp.com -- What Is Open Source

Cases for 610

Here are some of the cases that the MBA 610 students will be expected to know

TIME: Behind the Enron Scandal, More Enron

Adelphia

Shanghai Disney

Southwestern's Hedging Policy

Parmalat

Barings

LTCM and more LTCM

Bankers Trust

Answer key for 402

Finance 402 test 2 Key

1. A
2. E
3. E
4. d
5. b
6. e
7. e
8. a
9. e
10. b
11. c
12. d
13. d
14. c
15. a
16. b
17. b
18. d
19. d
20. b
21. c
22. b
23. a
24. a
25. a
26. a
27. d
28. d
29. c
30. e
31. b
32. c
33. c
34. d
35. c
36. a
37. c
38. c
39. a
40. e

Online NewsHour: Hedge Funds Failure -- October 1, 1998

Online NewsHour: Hedge Funds Failure -- October 1, 1998: "October 01, 1998 "--yeah it is really old, but this is another source for information on Long Term Capital Management.

Some cases

As promised in MBA 610, here are a few places you might want to look for your cases for your presentations and write-ups.

Each group will present one. Plan on abut a 15-20 minute presentation with 10-15 minutes for questions and answers. Also each group will submit a 4-5 page paper.


SSRN – FEN Educator: Courses, Cases & Teaching

Erisk.com's cases


Campbell Harvey's Class' Emerging Market cases


two I either wrote, or helped write

Adelphia:

Springfield Power Case



REMEMBER, you can also choose others. However, all cases (even those here) must be approved by me.

Wednesday's class

We DO have class on Wed! :)

UNCW students to be in control of $1 million | StarNewsOnline.com | Star-News | Wilmington, NC

UNCW students to be in control of $1 million |
StarNewsOnline.com | Star-News | Wilmington, NC:

"BB&T Corp., based in Winston-Salem, recently agreed to donate more than $1 million to the University of North Carolina Wilmington, creating an investment fund that will be managed by some of its top finance and MBA students.

Proceeds will pay for a lecture series on global capitalism as well as research on corporate ethics.

'It's real,' McDonald said. 'That's what's so great about this fund. I'm sure there's going to be no slackers in that program.'

Student-managed investment funds are widespread, but Larry Clark, dean of the Cameron School of Business, said he didn't know of another so large at a public school of UNCW's status. BB&T will submit the gift in five annual installments of $207,500 starting this October.

The amount means students will have the chance to invest in a wide range of stocks, bonds and other markets, UNCW officials said.

'It's an incredible opportunity,' Clark said."

Since I will be teaching SIMM next year I have been paying much more to Student managed funds. SBU's will have about $142,000 so if you are around and want to get some hands on experience, sign up for the class!

Help Wanted

Is anyone looking for a job (10-15 hours a week)? Must be coming back next year. Ideally you qualify for work study, but if needed I will pay out of my own pocket. I just really need someone to relieve some of the paper work that has accumulated (I would say I am like the NYSE in 1968 but it may be too geeky of reference ;) )

What would the work entail? Largely excel and data collection, but sometimes correcting (scantrons), organizing my office (at least a little ;) ) etc.

Need not be a finance major!

Need not be local (i.e. the vast majority of this can be digitized and done remotely).

Newmark's Door: DeVito's speech from Other People's Money

Transcript of Larry the Liquidator's speech

Newmark's Door: DeVito's speech from Other People's Money:

"This company is dead.

I didn't kill it. Don't blame me.

It was dead when I got here."



HT the Unknown Professor and Newmark's Door

Well worth watching!

In the spirit of the World is Flat:

Did you Know?


Carl Case pointed this one out to us.

Managing Expectations

Lest you get hopes up too high for 402, I still have a test to give, so I will not be able to give tests back until Thursday.

So we will be doing the next case: MCI on Tues, Compania De Telefonos de Chile on Thurs

FPL Group is on test

Was just asked what cases are on the test;

Butler Lumber
Dell Working capital
Fixed income valuation
FPL Group

in class:
Dupont
Loewen Group
Hospital Corp of America
Stone Container

402 test "stuff"

Gee, you'd think there was a test on Thursday with all the questions I have, so here so here goes:

1. Yes you need to know material from Cases
2. Yes you need to know the stuff we did before cases
3. Valuation is definitely fair game!
4. The test will be mainly multiple choice but may include other types of questions too. I really do not know yet as I have not finished it.
5. You are not allowed a cheat sheet.
6. It is in class.
7. Bring a pencil and a calculator!


hope this helps!

Jobs

From Career Services:
HSBC Information Session - MANDATORY for an Interview!
Thursday, March 22 4:00 - 5:00 p.m., RC 211/213
Positions: Accelerated Management Trainee Intern; Sales Account Executive
Majors: Business
On-campus Interview Date: Friday, March 23 (Open Schedule)

*Please bring your resume to the Information Session and be prepared to sign up for an interview taking place the next day!

MBA 610 MAJOR CHANGE

I have to go to Buffalo this evening and can not make the class. Therefore we will be redoing the organization of the material.


Taditionally I show Other People's Money later in the year. However, since I can not be there it will be shown today.

Background and Things to look for in the movie (and yes it is definitely testable).

1. This is an example of a hostile takeover. It was happening to break up the firm (it was worth more apart than it was together. This type of takeover was very common in the late 1980s (and to a lesser degree now when firms go private, sell off assets, and then go public again).
2. Danny Devito's character is the stereotypical corporate raider. He is loved by shareholders but hated (and often bad mouthed) by managers.
3. The takeover market is an external control mechanism. Note that it disciplines management.
4. Greenmail is a targeted share repurchase plan that hurts the majority of shareholders. It is seen as a way of management keeping their jobs at the expense of shareholders.
5. Stand-still agreements are agreements to not purchase any more shares until some future date.
   
6. Poison pills are an example of shareholder right's plans.
   
7. A 13D filing is required when you buy more than 5% of the firm.
8. The Proxy contest that occurs is fairly typical (although outdated in nature). Both sides get to present their case (much like politicians in an election).
9. How would a super majority amendment change this case?
10. Why aren't more firms employee owned?

And finally in an attempt to squeeze even more fun out (and learning) out of the case, please download this mini-case and be able to answer the questions.

Cost of Living - Cost of Living Calculator from CNNMoney

Cost of Living - Cost of Living Calculator from CNNMoney:

"• Using data provided by researchers at ACCRA, Inc., we compare key expenses in dozens of major cities. Costs include housing, utilities, transportation and health care."

Accountemps - Candidate Free Resources

Accountemps - Candidate Free Resources:

"2007 Salary Guide
Advancing in your career requires staying up to date on hiring and compensation trends. The 2007 Salary Guide provides projected average starting salary ranges for more than 100 accounting, finance and banking positions, as well as an overview of the issues currently impacting the industry."

Providence Business News

I thought some of you might be interested in this:
Providence Business News: "

A member of Rhode Island College’s Class of 1989, who wishes to remain anonymous, has donated $100,000 to establish a student-managed investment fund and class, the school said.

The donation, made in December, ultimately will benefit RIC’s School of Management. The money will establish a course in which a team of four to six students will learn short-term and long-term investment strategies, asset allocation and portfolio rebalancing, using U.S. and foreign securities and derivatives. The fund will start at about 65 percent U.S. equities, 20 percent bonds and 15 percent international stocks and derivatives."

A Fighter for Colleges That Have Everything but Status - New York Times

A Fighter for Colleges That Have Everything but Status - New York Times:

"...he argues that colleges with fewer than 3,000 students offer the best educational experience because students will have more opportunities to get to know professors well, both inside and outside the classroom.

“The smaller the school, the more impact it can have on a kid,” he said. He added, “My mission in life is to change the way people think about colleges"

402 assessment test

A few things have changed on the assessment test. I took it this evening and agreed with a student who challenged one of the questions. Additionally one of the other questions was marked correctly on the key (answers B or D) but for some reason the scantron only took D.

This resulted in 4 points being added to all but two of your grades. (I will email the two who did not get the 4 points separately.

Those of you who scored over 65 (including the 4 points just added) do NOT need to take a makeup exam.

A few comments on class participation

This is really just a reminder to everyone in my classes: Class participation matters a great deal in your grade (and can become the difference between passing the class or not if you do not do well on the tests and projects). Thus a few comments may be in order:

As I said on first day, you can if necessary (and on rare occasions) text message during class, BUT for a few of you it has become too common of practice. Moreover, there are also some of you who have been talking too much and have not been paying attention in class.

Please try to correct these problems as your grades do depend on it! (as well as potentially any curve for the entire class!!)

402 class update

We do have class on Thursday! I was dismissed from the Jury after I failed the IQ test ;) or something like that

402 class update

We do have class on Thursday! I was dismissed from the Jury after I failed the IQ test ;)

Finance 402 Tues 2/20/07

Reminder: class is canceled (will be made up as part of a night exam later in year)...also be woking on your cases!

FInally, I have lost the group lists, so I am asking eash team to email me their tem (and if you have no team please email me as well!

thanks!

jim

I will be back in time for MBA 610

Campbell R. Harvey's Emerging Markets Corporate Finance Cases

For Finance 402, please model your cases after these:

Campbell R. Harvey's Emerging Markets Corporate Finance Cases:

"A collection of 28 cases that deals with important financial issues in the setting of emerging markets. This is the largest repository of emerging markets finance cases in the world. For academic users, there is no fee for using these materials. For corporate and government users as well as multilateratal institutions, please send a donation made out to 'The Fuqua School of Business-BA456 Student Support Fund (Attn: Campbell R. Harvey)'. The address is One Towerview Drive, Duke University, Durham, NC 27708 USA. These funds are used to support student telephone, mail and travel expenses involved in the writing of the cases."

Office hours canceled today

Wed 2/14/07 office hours are canceled...sorry

Cases for Finance 402

Finance 402 Cases
The following cases will be covered in Finance 402

Read and be prepared to discuss in class

1. Intro to Financial Analysis
2. Butler Lumber Company
3. Dell's Working Capital
4. Fixed Income Valuation
5. Dividend Policy at FPL Group (A)
6. The Pension Plan at Bethlehem Steel (2001)
7. A-Rod: Signing the best player in baseball
8. Cost of Capital at Ameritrade
9. Arley Merchandise Corp
10. Tiffany and Company (1993)

Presentations-These will br presented, BUT all must be prepared to discuss

1. E.I. Du Pont De Nemours and Company
2. Loewen Group
3. Hospital Corporation of America (A)
4. Stone Container
5. MCI Communications (1983)
6. Compania De Telefonos de Chile
7. Marriott Corporation (A)
8. Salley Jameson: Valuing Stock Options in a Compensation Package
9. Whirlpool Europe
10. Health Development Corporation
11. Cooper Industries
12. Netscape's IPO
13. RJR Nabisco
14. Philp Morris and Kraft
15. Capital Projects as Real Options: an Introduction
16. Friendly Cards

NOTE ALL OF THE ABOVE CASES WILL BE TESTABLE WHETHER WE GET TO COVER THEM IN CLASS OR NOT!

Monday 4PM

Mandatory for finance 401 students, recommended for all!

"Monday, February 5 at 4:00 Tony Annunziato will give a presentation to finance students. Tony is currently engaged in setting up a new exchange in Dubai. I’m confident students will find this an interesting presentation. The presentation will take place in the Trustee’s room in Doyle and should last about an hour."

SMith-masulis table for fin 402

		Implied Cash Flow Change
		Negative	Zero	Positive
Leverage Change	Negative	Common Sale Dividend Decrease -	Common to retire debt Convertible bond to retire debt Common for pfd exchange Common for debt exchange Call of convertibles -	Calls of non convertible debt
	Zero	Convertible sale Investment decrease -	Debt for debt exchange Bond Sale to retire debt	Investment increase +
	Positive	Preferred sale Debt sale	Common repurchase financed with debt Bond for Common Exchange Bond for Pfd exchange +	Common repurchase Dividend increase Dividend initiations Special dividends +

Red = predicted negative abnormal returns

Black = no prediction or no abnormal returns expected

Yellow = predicted positive abnormal return

If you are viewing on a black and white monitor: the ones with + are positive, - are negative

The Modern Theory Of Corporate Finance by Cliff Smith

From Career services

Please share the following with your students.... Thank you!

All students are invited to join several alumni who are returning for Homecoming Weekend and will be available at an informal networking event to casually discuss career-related issues such as:

• relocating to a new geographic area
• managing on your own the first year after graduation
• identifying what job/internship approaches work best for various career fields... and more!

The event is co-sponsored by the SBU Career Center and Alumni Office. Details about the gathering are as follows:

"Meet & Mingle"

Friday, February 2

3:30 -- 4:30 p.m.

Room 219 Reilly Center

Light refreshments will be provided.

Please sign up in advance, if you plan to attend, by contacting the Career Center, room 216 RC, 375-2355.

Please bring pencils

Plese bring a #2 pencil to the finals...thanks! We are going to try and use scantrons as part because it is faster, but also for assessment purposes (i.e. we can make reports on what you have and have not learned for control purposes.

thanks!

Reminders for finals

You are allowed a cheat sheet (front and back) 8.5 by 11 inches.

Format is yet to be determined but probably more emphasis on mulitple choice.


Tests are in the regular class room.

As normal, turning someone in for cheating will result in a bonus of 2/3 of the total points on the test (and thus probably an A for the class!)

Good Luck!

FinanceProfessor.com Podcast - powered by FeedBurner

FinanceProfessor.com Podcast - powered by FeedBurner--

FYI --some new Audio uploaded

Forecast: MBA Hiring Up Again

Good news for graduating MBAs!!

Forecast: MBA Hiring Up Again:

"The hiring of MBA graduates is surging this academic year, with employers expecting to bring in 22.1% more MBA grads in 2007 than they did in 2006, according to a survey of companies across the country. An improved economy, business growth and employee retirement all contribute to this escalating demand for newly minted MBAs, says Andrea Koncz, employment information manager for the National Association of Colleges and Employers (NACE). And with growing industries comes growing competition to attract the best and brightest.

The Best Undergraduate B-Schools

The Best Undergraduate B-Schools:

"Like graduate B-schools, the undergraduate programs are separating into two clearly discernible tiers, with the 50 programs in our ranking standing head and shoulders above the rest. They're also dividing along the same philosophical split that now partitions the MBA world. There are those, including many at or near the top of the list, that are following a rigorously academic model, with a heavy emphasis on economics, statistics, finance, and accounting....They also use MBA teaching methods such as case studies, simulations, and team projects.

But at the great majority of business programs, students are exposed to less business theory -- too little, in the view of some experts"

Test questions reminders

Just a reminder, that if you want to have your Multiple choice questions included on teh final (and get 2% for each acccepted), they must be in by Friday.

thanks!

jim

Saving the World, One Purchase at a Time

THis ties in nicely with the discussion I often have in intro clases about how if you are paid a percentage of profits, it may be that people "play games" with the profits numbers so as to not have any left.

Incidentally, BonaResponds is one of the charities that receives money from Goodsearch. We get about 1 cent per search if you list BonaResponds as the charity.

Saving the World, One Purchase at a Time:

"GoodSearch.com, an Internet search engine, gives 50 percent of its advertising revenue to a huge slate of charities chosen by its users.

It’s important to note that these companies are giving away a percentage of revenue, not profit. That means they’re putting their balance sheet more at risk than an organization where giving is dependent on making money for its owners first. "

Saving the World, One Purchase at a Time

THis ties in nicely with the discussion I often have in intro clases about how if you are paid a percentage of profits, it may be that people "play games" with the profits numbers so as to not have any left.

Incidentally, BonaResponds is one of the charities that receives money from Goodsearch. We get about 1 cent per search if you list BonaResponds as the charity.

Saving the World, One Purchase at a Time:

"GoodSearch.com, an Internet search engine, gives 50 percent of its advertising revenue to a huge slate of charities chosen by its users.

It’s important to note that these companies are giving away a percentage of revenue, not profit. That means they’re putting their balance sheet more at risk than an organization where giving is dependent on making money for its owners first. "

Bo Jackson commercial

More audio

From MBA 604 but nearly the same as Fin 401

CORRECTION ON Chapters for test -Fin 401

The correct chapters for the test are

7,8,13,14,17,18,19

sorry I had looked at the wrong text book...

More on CAPM--Audio

Looks more at CAPM, its problems, and some alternatives

THis is an introduction to CAPM--it is from FIN 401 but is very close to the coverage in MBA 604

401 Test site

6:30 in Murphy C
2 hours

SSRN – Behavioral Finance (Topic)

This is a good link for both 604 and 401....looks at top downloaded papers on Behavorial finance..

SSRN – Behavioral Finance (Topic)--

so good it is worth cross listing

NEW NEW NEW!! BonaResponds is happy to announce a new phase in our efforts to assist the Buffalo Region reciver from teh October Surprise snow storm. This new phase going be in conjunction with Erie county, the Olmsted Parks, the West Seneca Youth Bureau Americorps. This is a HUGE opportunity for volunteers to not only help Buffalo but also to develop ties with the Americorp program.

This weekend we will be working in areas of South and East Buffalo that have barely been touched since the storm. These jobs will include cleaning up properties of the poor, elderly, and handicapped in the area as well as cleaning up MLK park (.

Our base of operations will be the Charles E. BurchfieldNature & Art Center- 2001 Union Road - West Seneca, NY 14224 between Clinton and Race/Indian church road. MAP

We really need a good showing to start off the new relationships and to show what we can do. So if you can come, PLEASE do and bring some friends! Bring your roommates, team mates, friends, and enemies. The more the merrier! It will be fun and the impact will be immense! (and remember for every time you volunteer for a full day of service, we will take $10 off the cost of a trip to the Gulf).

We will be leaving the Murphy Lot on SUNDAY at 8:50 AM. We will return to campus at about 7:30. Dinner will be provided. We have 2 vans, but be prepared to car-pool (we will pay $10 for gas for any vehicle of 4 or more volunteers).

Dress for the conditions: you should wear boots, clothes you don't mind getting dirty, and a good pair of gloves. It is also recomended that you bring a change of clothes for the ride home.

Come on out, it is going to be a huge day and a great way to kick off several new service relations!


* This looks great on a resume, counts as service hours, and you get to network with some of the best in the area. You will be very glad you came out!!




For more info email BonaResponds@sbu.edu

401 project

Project for finance 401

Due date: First class after Thanksgiving

You are to calculate Beta for 6 assets for every 5 year time period. Is beta constant? What implications may this have for the CAPM?

* a 2 page write up of findings and limitations of the study should include the actual numbers.


Remember to use returns based on the adjusted close.

Here is a link to the historical SP 500 data.

asset 1: SP small cap index-from 1995
asset 2: Dell--from 1988
asset 3: IBM-from 1962
asset 4: Hershey-from from 1985
asset 5: Nike--from 1987
asset 6: Anheuser Busch from 1983

for each asset:
Calculate beta for overall period
Calculate beta for every 5 year period from 1990-present.
Compare the calculated beta with reported beta


For extra credit: Then compare the predicted returns and the actual returns for both the individual stocks and the portfolio of the 6 stocks.

Finance 401--answer Key

Multiple Choice (2 points each)
1.c	25.c	49.d
2.e	26.c	50.c
3.c	27.a	51.b
4.b	28.e	52.a
5.b	29.d	53.c
6.a	30.drop	54.d
7.b	31.a	55.a
8.cd(either)	32.a	56.e
9. a	33.b	57.d
10.c	34. c	58.d
11.b	35. c	59. a
12.c	36. e	60.d
13.d	37.c	61.a
14.b	38.c	62.c
15.b	39.c	63.d
16.b	40.d	64.c
17.c	41.e	65.e
18.c	42.d	66.c
19.c	43.a	67.d
20.c	44.b	68.a
21.a	45.b	69.c
22.e	46.b	70.e
23.d	47.ac
24.e	48.a

604 answer Key

Multiple choice-2 points each			True False 2 points each
1. A	26.c	51.a	1.f
2. C	27.c	52.c	2.t
3 D.	28.b(any)	53.b	3.t
4.D	29.c	54.b	4.f
5. B	30.c	55.2.78	5.t
6.A	31.b	56.a	6.t
7.C	32.a	57.b	7.f
8.D	33.any	58.any	8.f
9.A	34.d	59.a	9.f
10.A	35.b	60.d	10t.
11.B	36.b	61.a
12.C	37.b	62.b
13.E	38.c	63.c
14.ANY	39.a	64.b
15.C	40.c	65.b
16.E	41.any	66.a
17.B	42.b/c	67.b
18.D	43.a	68.any
19.D	44.e	69.any
20.D	45.c	70.e
21.A	46.d
22.B	47.d
23.B	48.d
24.D	49.a
25.C	50.b

TODAY! Buffalo Job fair

from career services:

STUDENTS... it's not too late!

You can still sign up to attend JobQuest '06, a regional career fair taking place this Wednesday. Employers from a wide variety of career fields will be seeking intern, summer, full- and part-time candidates.

JOBQUEST '06

Wednesday, November 1

3:00 -- 6:00 p.m.

HSBC Arena

Buffalo, NY

Please advance register with the Career Center, room 216 RC, and become eligible to win prizes at the event including $100 Visa Cash Card, Buffalo Sabres Tickets, and more! Transportation is available on a limited basis for those who need it. Stop by the Career Center today for more info. and to pick up your free, event parking pass.