For Today’s Graduate, Just One Word - Statistics - NYTimes.com

For Today’s Graduate, Just One Word - Statistics - NYTimes.com:

"Ms. Grimes is an Internet-age statistician, one of many who are changing the image of the profession as a place for dronish number nerds. They are finding themselves increasingly in demand — and even cool.

“I keep saying that the sexy job in the next 10 years will be statisticians,” said Hal Varian, chief economist at Google. “And I’m not kidding.

The rising stature of statisticians, who can earn $125,000 at top companies in their first year after getting a doctorate...”"

What is the role of the CEO?

Getting the best possible talent is high on the list.


You have to have the best people. Can I upgrade the firm? That is the role of the CEO:

A Different Kind of Teacher Cheating - Freakonomics Blog - NYTimes.com

A Different Kind of Teacher Cheating - Freakonomics Blog - NYTimes.com:

"PowerPoint makes lecturing easy, boring, and forgettable, the Chronicle of Higher Education reports. That’s exactly why lazy students like it: if their teacher isn’t truly engaging with the material, they don’t have to either."

Kevin J. McCue: Using the written word in tribute to a teacher : Opinion : The Buffalo News

From an SBU grad.

Kevin J. McCue: Using the written word in tribute to a teacher : Opinion : The Buffalo News:

"I suggest three ways to immediately improving your writing:

1. Be concise, avoid wordiness.

2. Use short sentences whenever possible.

3. Always proofread your writing, and then read out loud to prevent mistakes.

Simple, effective, and easy-to-incorporate tips!"

Do Elite Colleges Produce the Best-Paid Graduates? - Economix Blog - NYTimes.com

Do Elite Colleges Produce the Best-Paid Graduates? - Economix Blog - NYTimes.com:

Yes. At least somewhat. But even at small schools, many make more than their large school counterparts.

"Majors matter. Quantitative-oriented degrees – like engineering, science, mathematics and economics — filled most of the top 20 slots in both highest starting median salaries and highest mid-career median salaries."

and later:

"There’s a lot of variation within each school, which means the lowest-paid graduates of a very elite school may earn less than the highest-paid graduates of a much less elite school.

For example, Mr. Lee suggests comparing Black Hills State University (B.H.S.U.), the school with lowest median pay, to Dartmouth College. The 75th percentile mid-career pay of B.H.S.U. is comparable to the 10th percentile mid-career pay of Dartmouth grads.

In other words, one in four B.H.S.U. grads earns more at mid-career than one in 10 Dartmouth grads.

This variation within a school is called a “spread.”"

Book Review — “What Got You Here Won’t Get You There” by Marshall Goldsmith (2007) | Perfection Consulting

How many do you have?

Book Review — “What Got You Here Won’t Get You There” by Marshall Goldsmith (2007) | Perfection Consulting:

"In his book, Marshall Goldsmith, a well-known executive coach, identifies 20 negative characteristics commonly found in corporate America. These are habits that he believes hinders many successful executives from reaching the next level of achievement. Goldsmith then follows up by offering strategies for transforming these bad traits into positive behavior."

The Best Cover Letter I Ever Received - David Silverman - HarvardBusiness.org

The Best Cover Letter I Ever Received - David Silverman - HarvardBusiness.org:

"Here's what I like about this cover letter: It's short. It sums up the résumé as it relates to the job. It asks for the job.

The writer of this letter took the time to think through what would be relevant to me. Instead of scattering lots of facts in hopes that one was relevant, the candidate offered up an opinion as to which experiences I should focus on.

And that means the writer isn't just showing me skills related to the job, he's showing me he'll be the kind of employee who offers up solutions — instead of just laying problems on my desk."

Three Reasons Why Your Resume Ends Up in the Discard Pile | The View from Harvard Business | BNET

Three Reasons Why Your Resume Ends Up in the Discard Pile | The View from Harvard Business | BNET:

"Fact is every hiring officer probably has his or her own unique set of prejudices that set off little alarm bells as they read through job applications. But David’s post is also a very strong reminder of resume blunders that will probably matter to any number of potential employers."

1. Get the formatting right.....
2. Choose verbs that mean something...
3. Rewrite your résumé for each job application...

Free Money Finance: The One Thing that Makes a Winning Resume

Good advice!

Free Money Finance: The One Thing that Makes a Winning Resume:

"Your resume needs to scream RESULTS!!!!! You need to have a large number of quantifiable accomplishments documented concisely on your resume (in bullet points so they are easy to read). They also need to be written correctly to deliver maximum impact. And even if you 'only' have minor accomplishments, there are ways to make them sound impressive, so take the time and effort to do so."

Writing revisions

Well worth the time! (To read the article and to revise frequently :) )

The Age of the Both/And CEO - Conversation Starter - HarvardBusiness.org:

"1 to 5 recipients = 2 to 4 revisions
5 to 10 recipients = 8 to 12 revisions
Company-wide or to Executive Committee = 30 to 50 revisions

Even the simplest missive to one person benefits from a couple of extra passes, and if it's going to the management committee, expect everyone to have changes (and changes to those changes).

Here's a checklist to consider when revising:"

Cheat sheets

All classes are allowed the front and the back of a page as a "cheat" sheet

Nation Ready To Be Lied To About Economy Again | The Onion - America's Finest News Source

Nation Ready To Be Lied To About Economy Again | The Onion - America's Finest News Source:

"'I thought I wanted a new era of transparency and accountability, but honestly, I just can't handle it,' Ohio resident Nathan Pletcher said. ...'From now on, ....' Pletcher added. 'Tell me my savings are okay, everybody has a job, and we're No. 1 again. Please, just lie to my face.'

Oh wait it is from the Onion ;) Thought you needed a study break!

Good job Tennis Teams!!

Congrats to the tennis teams!

Bona hoops avoids academic penalties : Sports : The Buffalo News:

"Several Big 4 athletic programs were recognized for academic excellence: UB’s women’s cross country and swimming teams, Niagara’s women’s basketball and volleyball teams, and St. Bonaventure’s men’s tennis and women’s tennis teams were awarded Public Recognition Awards for the 2008-09 school year."

Final schedule

Finance 402: Murphy 107 Monday 3:45
SIMM (Finance 410): SIMM room 2:30 Tuesday
MBA 610 WED section: Wed 5/6/09 in class room
MBA 610 Tues Section: Tues 5/12/09 in class room

Week 13--MBA 610

Derivatives and governance

Bill's Presentation on risk management (Insurance emphasis)

Bill Hammond's Presentation on risk management (Insurance emphasis) and career choices/tips

Submit your questions here!

AS I just started making the exams, reminder: you can submit your questions here. If they are selected, you get points added to your final! Last test one student had 8% (not 8 points!) added to her test.

FinanceTestquestions - home

The presentation On Career Choices and Insurance

Bill Hammond's presentation



Watch Bill Hammond's presentation at SBU School of Business in Educational & How-To  |  View More Free Videos Online at Veoh.com

Corner Office - He Wants Subjects, Verbs and Objects - Question - NYTimes.com

An interesting article on interviews.

Corner Office - He Wants Subjects, Verbs and Objects - Question - NYTimes.com:

"And so what you’re trying to find out about are the intangibles of leadership, communication style and the ability to, today, really adapt to change.

And there are a lot of ways to go at that. I like to ask people what they’ve read, what are the last three or four books they’ve read, and what did they enjoy about those. And to really understand them as individuals because, you know, the résumés you get are wonderful résumés. Wonderful education, great work history. So you have to probe a little bit deeper into the human intangibles, because we’ve all seen many instances where people had perfect résumés, but weren’t effective"

What your interviewers are likely reading

While I am sure you are all up to date on "recent" books, knowing what your interviewers are reading may help you get a job (or may help you do better at your job!) so here are some links you may want to check out:

On Long Tails:





On Nissim Taleb on what is a Black Swan:





Thomas Friedman on the World is Flat (long but very good):



Thomas Friedman on Hot, Flat, and Crowded:



Jim Collins on "from Good to Great" and "Built to Last"



Malcolm Gladwell author of Blink and The Tipping Point:




What is "Peak Oil"


NOVA on "The Wisdom of Crowds"


Made to Stick:

MBA 610 Week 11

Derivatives (after looking at the Blog for a while)

Facebook dumbs you down, FinanceProfessor.com smartens you up!

Well that explains some things....

TG Daily - Facebook dumbs you down: "A study from Ohio State University, based on a study of 219 students, suggests that the more you use Facebook, the less you study, and the worse your grades get."

So here is the new strategy: spent your time on FinanceProfessor.com instead. I can see the headline now:

"A study from St. Bonaventure University, based on a study of 110 students, suggests that the more time you use FinanceProfessor.com, its blogs, and podcast, the better the grades you get. "

Week ten after break

A fast look at dividends and Buybacks then intro to dividend

Finance students fret over their futures - Business - MiamiHerald.com

Finance students fret over their futures - Business - MiamiHerald.com:

"The meltdown in the financial markets has top investment banks pulling back on hiring, leaving finance students like Fernandez insecure about their future.

Growing up in a paycheck-to-paycheck household, financial security was a top priority for Fernandez when she decided on a career as a financial analyst.

But with job opportunities becoming scarce, her plans might be derailed -- at least for the time being.

And later:

"Emery, a finance professor for more than 30 years, says that students should focus less on the business sector's current situation and more on the benefits of education, regardless of their field.

''Regardless of profession,'' he said, ``the formula is simple: With a little hard work, and being at the right place at the right time, those who distinguish themselves will become successful.''"

Google's Latest Conquest: Twitter? - Forbes.com

Update on Twitter:

Google's Latest Conquest: Twitter? - Forbes.com:

"Massive search engine Google is reportedly in talks to buy Twitter, the free micro-blogging Web site, expanding its ever-increasing empire.

Twitter's price tag is not yet clear but it could be above $250.0 million, according to a Thursday posting on TechCrunch."

Stay tuned! TO the group doing this as a presentation, I am really looking forward to it :).

FURTHER UPDATES

From SeekingAlpha:

""It should come as no surprise that Twitter engages in discussions with other companies regularly and on a variety of subjects," continues Stone. "Our goal is to build a profitable, independent company and we're just getting started."

Sources close to Twitter tell The Deal the rumor of a potential "Twoogle" is without foundation.

From ClusterStock

"If Google isn't in talks to buy Twitter, it should be. Specifically, it should offer the company $1 billion, cash"

The article goes on to state why. Some of the reasons are good, others at least interesting.

Week 10-Current events, Rights issues, Self registration

Notes from week 10

SBUSchoolofBusiness

New Videos of Rodney Paul and Carol Fischer are up.

SBUSchoolofBusiness Blog

Q&A with Alice Schroeder, biographer of financial master Warren Buffett

We used the SnowBall book in 402...this is an interview with the author...fascinating

Q&A with Alice Schroeder, biographer of financial master Warren Buffett:

"All of these books that say you can get rich by investing like Warren Buffett, it’s a bunch of baloney. You can’t do it. He’s not only brilliant, but he works like a demon from morning until night and he’s been doing that for 70 years. So, when you see him and you’re around him, you realize the futility of trying to replicate his achievement. It can’t be done. But, at the same time, he lifts your aspirations in many other areas, including being extremely good at whatever it is you are good at. He made me far more focused in my career"

More Capital Structure

Sorry, this had been on the podcast, but I never actually linked to it from the blog.

Intro to Capital Structure

This is an introduction to Capital Structure. It covers Modigliani and Miller and some on WACC from MBA 610.

Major field Exam for all 402 students

From Mary Jo Brockel

"Please remind your students in ACCT 420, BIS 420, FIN 402 and MKT 410 to sign up for the Major Field Exam as soon as possible. They can either call Jenifer Spencer at 375-2111 or stop by her office in Murphy Room 201. We only have about 10 signed up of the 134 students who should be taking this exam. Your help in getting them to sign up is greatly appreciated.

If you were unable to hand deliver any of the letters to students, please drop them off with Jenifer and we will mail them directly to the students.

I will be sending out my first reminder e-mail to the students on Thursday or Friday to the students who have not signed up.

The exam will be given on the following dates and times:

Sunday, March 29th 6:00 – 9:00 pm

Monday, March 30th 6:00 – 9:00 pm

Wednesday, April 1^st 6:00 – 9:00 pm

Thursday, April 2nd 6:00 – 9:00 pm

Sunday, April 5th 3:00 - 6:00 pm and 6:00 pm – 9:00 pm"

Insider trading

A fast look at insider trading from MBA 610

Jobs stuff

If you are in my class (or were in a previous semester) and want me to look over resume, just let me know. Not sure if I can help, but I guess can't hurt too much. Please get it to me this week or next.

Was speaking with a SBU alum last night who said I should mention Dallas as a relatively hot job market. He also agreed wholeheartedly, that looking at the SEC, the Fed, and other regulators makes much sense right now.

Personally, I am still looking for a part time (say 10 hours a week) person looking to earn some money, improve a resume, and learn some things. Ideally someone who is back next year, but I have reached a pretty desperate spot so will be open to others as well.

Update: SBU just sent the following link to their CareerFest.

Ben Stein's advice for those college students looking for work.

"Imagine you are an employer looking at your whole college class. Would you hire you? If not, make yourself better. You can be a rebel later. For now, do what you need to do to get a job."

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.

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.

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.

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.

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.

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"

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!!

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"

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.

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.

Finance and BonaResponds in one video!

YouTube - Finance @ St. Bonaventure University - Director's Cut

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."

Michael Milken on activism | Video on TED.com

Michael Milken on activism | Video on TED.com:

I am not sure where to put this one. Milken is mentioned in my classes all the time, but this is not finance. Moreover, while posted only last month, it was filmed 8 years ago. He talks on everything from finance, to charity, to adding value. So I will put it on FinanceClass and the RandomTopics2 blogs. He talks about the difference people can make, which while not strictly a financial topic, it is a lesson that is VERY important. (oh and many of his solutions and language are financial which again shows that no matter what you want to do, having a good financial background will help immensely.)

"Michael Milken talks about using your own particular set of skills to make real change in the world. In his case, the energetic mind that once created exotic bonds is now driving the 'Manhattan Project of cancer' -- with lifesaving results."

The Element and Class ideas

I am reading The Element which is essentially based on the premise that we all learn differently and have different strengths and weaknesses. It has gotten me thinking (which is almost always a bad thing..lol)...what else could be do to make your learning experience better/more fulfilling?

So while I can not alter the syllabus, I have some ideas that could be used as a project for SIMM, used to up a poor case in 402 (or maybe as 20% bonus on the final), and/or a bonus/extra credit in 610.

This is not required and definitely not an exhaustive list. Just a few things that came to mind that sound fun.

• A video presentation (at least 10 minutes) on anything tied to finance. For instance, do a case study but make it a video.
  
• A summary of important finance papers that could be shared online with others not only in class but with anyone anywhere.
• A presentation(?) that could be used locally at maybe the WW II Musuem (?) or on campus showing Wall Street at War? Or Wall Street during the Depression? or ???
• A web-quality presentation on local finance jobs that could be shared with future classes (sort of a what do finance people do locally)
• Other things??
  

If any of this sounds like something you would like to do, let me know.

Technology to the rescue again!

Given the large class size in a few of my classes I understand that you may not have the opportunity to ask everything you would like in class. Coupled with the inefficiencies involved with office hours (for instance you work then, it is snowy) and the fact that many students are afraid to ask questions, we are going to try to improve communication using this form.

If you have questions you can include them. You can also mention anything that I was not clear on. I will check the forms several times a week to see what I can do to make the class more beneficial for you.

And this is much better than weekly quizzes which seemingly is the alternative. :)

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

Fin401mainpage

Projecting Cash flows--the spreadsheet will be modified but here it is to start"

Sorry, I changed the file online but forgot to tell people...

here is the 401 projected financials:
http://www.financeprofessor.com/fin301/projectedfinancials.xls

Colleges spending more time teaching financial literacy | Dallas Morning News | News for Dallas, Texas | Pamela Yip | Personal Finance | Business Colu

The Finance Club is talking about doing this. Any interest?

Colleges spending more time teaching financial literacy | Dallas Morning News | News for Dallas, Texas | Pamela Yip | Personal Finance | Business Columnist | Dallas Morning News:

"'One of the things that we have found is that the population has very little background in basic economics and personal finance,' said Steven L. Cobb, center director and chairman of the economics department. 'The earlier that we start teaching economics, the earlier students begin to understand these concepts and the better the chance that they will be good consumers.'

Other schools are also active in offering personal finance courses."

Free Money Finance: A Better Way to Get the Salary You Want

Deciding whether or not to mention salary requirements is always a question interviewers have, so this advice from FreeMoney Finance is well worth reading!

Some good advice from Free Money Finance: A Better Way to Get the Salary You Want:

"I think this advice is not realistic. If an interviewer asks you point blank what your salary requirements are, you may be able to dodge him once or twice with a smooth, non-committal answer. But if he presses you (which I would do), you're either going to have to tell him or look uncooperative/obstinate -- which obviously doesn't put your best foot forward during the interview process.

So here's an alternative that I like from Yahoo -- price yourself like a house"

Read more about this...BEFORE you interview!

On and Off-Campus Recruiting

On and Off-Campus Recruiting:

"Register with The Career Center by opening a free, SBU College Central Network account and post a current résumé to it. The site is located at: www.collegecentral.com/sbu. For information on how to navigate College Central Network, click HERE.

** Attend an 'On-Campus Recruiting Orientation' in order to be eligible, if selected, to participate in an interview. You must attend an orientation before you sign up for an interview. Previous recruiting-orientation participants do not need to attend again. Please check with the Career Center to determine your eligibility."

MANY finance jobs are filled in the Fall....so now is the time to begin....Feel free to show me your resume as well. Far from an expert, but I will mark it up for you.

Meetings...

12:30 Friday BonaResponds leader meeting...looks great on a resume! and you know it is the right thing to do. Become a leader!

and then we can walk over to

1:00 Friday Finance club meeting:

There will be a Finance Club meeting this Friday at 1pm in the SIMM room, located in the basement of the R.C. Topics discussed, among other things, will be the annual New York City Trip and the Alumni Golf Tournament. The meeting is open to all students regardless of year or major. If you are unable to attend the meeting and would like information on the club or events please e-mail Mark Larry at larrymj@sbu.edu .

The Park Library - Bloomberg Terminal Guide

The Park Library - Bloomberg Terminal Guide-
Another Bloomberg certification site.

bloomberg+certification - Fast Answer Search - Baker Library | Bloomberg Center

bloomberg+certification - Fast Answer Search - Baker Library | Bloomberg Center:

"Why complete certification? Gain comprehensive knowledge of Bloomberg Professional service, optimize job performance, and differentiate yourself from peers."

College Job Market

From Business Week College Job Market:

"We talk to nervous college seniors who are about to enter the job force in a very uncertain economic environment. We'll provide advice on how to land that first job"

The Last-Minute Résumé Filler

The Last-Minute Résumé Filler:

"Nonprofits can't always afford to pay for an intern but are frequently looking for extra help. Volunteering over the summer, even for just 10 or 15 hours a week, can provide a résumé-worthy experience, says Diane Crist, director of the career development center at the University of St. Thomas' Opus College of Business in St. Paul, Minn. The experience may also allow the student to demonstrate some initiative and organizational savvy, qualities that will appeal to future employers, Crist notes."

Who Killed Montana Power?, Steve Kroft: Ex-Shareholders Feel Misled - CBS News

From class:

Who Killed Montana Power?, Steve Kroft: Ex-Shareholders Feel Misled - CBS News:

"Its demise may not be the biggest scandal of our time, but to its stockholders, it shows how greed and outright stupidity destroyed one of the oldest and proudest companies in America. Correspondent Steve Kroft reports."

Answer Key for MBA 610 Test 1--Hilbert version

I have zero idea what happened with the key, but it was so far off it was as if different test. So it will be regraded, but here is the key.

1. e
2. c
3. a
   
4. c
   
5. d
6. b
7. e
8. c
9. a
10. 10.b
11. d
12. e
13. d
14. d
15. c
16. a
17. b
    
18. e
19. c
20. 20. b
21. b
22. d
23. THROWN OUT
24. e
25. b
26. d
27. d
28. c
29. e
30. 30. e
31. d
32. a
33. a or b
34. c
35. d
36. c
37. e
38. c
39. e
40. 40. e
41. c
42. d
43. a
44. d
    
45. c
46. c
47. THROW OUT
48. d
49. a
50. 50. a
51. b
52. a
53. d
54. c
55. a
56. e
57. b
58. e
59. b
60. 60. d
61. c
62. a
63. b
64. c
65. c
66. c
67. a
68. throw out
69. c,e
70. 70. c
71. e
72. c
73. D or E
74. e
75. c
76. d
77. d
78. c
79. c
80. 80. b
81. c
82. c
83. b
84. c
85. c
86. c
87. b
88. e
89. b
90. 90. a
91. d
92. b
93. b
94. d
95. e
96. a
97. d
98. c
99. b
100. THROW OUT
     

The result of this is that the average went up by about 20 points out of the 300.

MBA 610 Hilbert tests

There was a problem with the key. Just looked over the report and not sure what happened, but am going over the test instead of using the key provided...Seems like the errors were all concentrated in questions that came from the text's test bank.

Will update as soon as possible.

402 cases for 4/21 and 4/23

4/21 Genzyme/Gel Tex (read Introduction to Debt policy and value)
4/23 Jet Blue IPO valuation (Read Structuring Corporate Finance

Looking for a job?

From Career Services:

Dresser Rand – Financial Management Acceleration Program (FMAP)
Majors – Accounting, Finance (must have 21 hours of accounting courses)
Degrees – Bachelors, Masters (May or December 2008)
GPA – minimum 3.0
Resumes due by Noon, April 18, to the Career Center

Additional information is available in your SBU College Central account (www.collegecentral.com/sbu). Please contact the Career Center, room 216 RC, if you have any questions.

History lesson

For much of the second part of 1968 and some of 1969 the NYSE changed its operations as part of a "Paperwork Crisis." Specifically, for the second part of 1968 the market closed on Wednesdays and for much of 1969 the market was closed early in order to get caught up on paper work.

You can read more about this from the NYSE itself.

The reason I am telling you this, is that I am going to declare my own paperwork crisis and give Finance 402 a reprieve on Wed. We will have class, but no case will be presented. You will still be responsible for readings and for coming.

We will be having a regular class.

finance cases

http://www.erisk.com/Learning/CaseStudies.asp

Student investment funds

Michael Price Student Investment Fund: "The Michael Price Student Investment Fund (MPSIF) is a family of funds managed directly by NYU Stern MBA students. The fund, part of the overall NYU endowment, was established in 1999 through a generous gift from Michael Price, managing partner, MFP Investors, LLC and former chairman of Franklin Mutual Series funds."

University of Maryland: Mary Lund Davis endowed Pacific Lutheran University the sum of $25,000 for the establishment of The Business School Student Investment Fund, now named the Mary Lund Davis Student Investment Fund (SIF). The primary purpose of this endowment is to provide a learning experience for students in investment portfolio management.

Texas: The student portfolio managers are selected through an application and interview process each November. Once selected, the new student managers begin training with the graduating student managers, and take over the Fund portfolio in March. The managers are responsible for virtually all activity with the Fund's portfolio, including company research, economic forecasting, risk management, pitching stock and bond ideas, working with the Fund's brokers to execute trades, and producing written reports and verbal presentations to the Fund's Advisory Committee.

Wednesday Career Fest

Heard from a past student today that he is definitely coming and looking to hire, so you are crazy not to go!
From the Career Center:

The Career Center will be hosting it’s annual, on-campus career fair, CareerFest ’08, this Wednesday, March 26. It will take place in Doyle Dining & Trustees’ rooms from noon to 2 p.m. and is open to students of ALL CLASS LEVELS and ALL MAJORS!

Students may stop in anytime and will be eligible to win prizes. Please encourage your students to attend!

Finance students, those just beginning their career as well as those with some experience, would benefit in many ways by attending and speaking with employer representatives.

While we highly recommend professional attire (business suit/business casual), we realize some students may not be able to “dress up” and they are also welcome. Representatives will be sharing information about career fields in general, internships, graduate schools, volunteer and part/full-time career opportunities. Currently, the following employers are looking for finance or related majors.

Corning Inc.
Lockheed Martin
Robert Half International (AccounTemps)
Manning & Napier
AXA Advisors
Pioneer Credit Recovery
JP Turner & Co./Clark Capital Partners
Prudential Financial

Additional information about the event, including a list of employer participants, is available online at http://www.sbu.edu/academic_resources.aspx?id=2926. Please feel free to contact me with any questions and THANK YOU for encouraging your students’ participation in this major event!

Finance 402 Cases

Cases:


3/10 Monday: Ben and Jerry
3/12 Wednesday: Fed Ex vs UPS

3/17 Krispy Kreme (Read the Financial Detective)
3/19 Padgett Paper (Kota Fibres not presented but is testable)

3/24 Server Vault &Best Practices-Not presented but it is testable--do we have class?
3/26 Nike (Coke vs. Pepsi not presented but it is testable)

3/31 Coke and Pepsi (read Boeing)
4/2 Compass Records (read Investment Detective)

4/7 Genzyme/Gel Tex (read Introduction to Debt policy and value)
4/9 Jet Blue IPO valuation (Read Structuring Corporate Finance policy)


Others will be announced ASAP

all are testable (so "read" or presentations)

Cheat Sheet for 610 test

The test will be largelt Multiple choice (given size of class really do not have much of an alternative). You are allowed a single page (front only) 8.5 by 11 cheat sheet. You can write as small as you want.

Free Pizza! Ok, so there are better reasons to go!

A gotta go!!

All students are invited to attend a lunchtime panel presentation of five, recent alums who will share job-seeking advice and provide helpful tips about career decision making. Topics to be discussed include networking successfully, getting the job you want, and standing out in a competitive job market. The program is co-sponsored by The Career Center and Alumni Services.

Advice & a Slice – Backpack to Blackberry

Monday, February 18
12:30 – 1:25 p.m.
Hall of Fame Room, Reilly Center
Pizza and soda will be provided.

Advance registration with the Career Center, room 216 RC, is requested. Please sign up by Friday, February 15. All pre-registered students will be eligible to win a Bluetooth courtesy of Verizon Wireless! You must be present at the event to win.

Thank you,
Renée

Renée Caya-Bizzaro, Assistant Director, The Career Center

From Career Services

Please share the following information with your students…

In order to be eligible to participate in on-campus recruiting, students must attend an on-campus recruiting orientation before interviewing. The following orientations are being offered this semester for students who have not yet attended one and are interested in participating in on-campus interviewing. Orientations take place in the Career Center, room 216 RC.

12:30 - 1:20 p.m. -- February 1 & 6
3:00 - 3:50 p.m. -- February 5

3:30 - 4:20 p.m. -- February 6

Please contact the Career Center if you have questions or need additional information.

Thank you,
Renée

Renée Caya-Bizzaro, Assistant Director, The Career Cente