Ivo Welch, Teaching, Fall 2006

Ivo Welch, Teaching, Fall 2006:

"Recommended Curriculum For Students Interested in Finance

The following are my personal opinions for a good curriculum for students that want to specialize in financial economics. They have not been endorsed by any other faculty or committee."

Some links that might hep the assigment for fin 401

I have had a couple questions such as

* But I'm having a hard time finding a stock that has fallen because of bad news
* "I am working on the assignment to research a stock that has had a major collapse. I have been on yahoofinance, but I am really unfamiliar with searching for stock. Basically, I am at a loss on how to even start. Appreciate any help you can give me."

I am guessing a few others might be having trouble:

So, let's see, if I were doing this, I would start by looking for large losers for the year. Here is a very good stock screen from MSN Money that gives us the biggest losers for year.

Power Searches: Investing - MSN Money

Listing of biggest losers







Then go to the SEC Edgar site and look up some of the losers.



Hope this helps.

YTD Assets Class Returns: ...

Twitter / Lawrence McDonald: YTD Assets Class Returns: ...:

"YTD Assets Class Returns: Leveraged Loans 44%, High Yield 41%, Emerging Mkts 25%, S&P 15%, IG Credit 13%, MBS 7%, Treasuries -3%"

A good check of if you remember your intro finance? Check the S&P return using a spreadsheet and Yahoo finance.

Links we used in class

S0me of the links we used in 401 class:

Section:Business - Google Fast Flip

The News timeline

Here is the option calculator we used in SIMM

Here is the link to the Future Value Spreadsheet we used in 401

here you go! Future Value Spreadsheet.

From my 301/604 classes where I used it to show that small amounts do add up when you let them compound for a long period. (we used the cost of smoking as the spur)

Ethics-Matters: Share Price as an Indicator for Good Corporate Governance

This is almost exactly like what we were talking about in 401 class the other day. Interesting!

Ethics-Matters: Share Price as an Indicator for Good Corporate Governance:

"...acting ethical in a business means, “Trying to maximize the long-term value of the firm”. In a simple manner, if you don’t act that way, it is a long-term loss for your party.

I’ll try supporting this with evidence from one of the most popular examples of contemporary corporate crimes in United States, “Tyco International” case."

To Multitask Effectively, Focus on Value, Not Volume - Conversation Starter - HarvardBusiness.org

To Multitask Effectively, Focus on Value, Not Volume - Conversation Starter - HarvardBusiness.org:

"...let me suggest that the alternative to multitasking is not single-tasking. In this day and age, that would be too slow. Rather the answer is to shift our mindsets from a focus on volume to a focus on value. Instead of checking off all the boxes and trying to get everything done, let's identify those activities and initiatives that will truly add value. It's OK not to do certain things, or to do them later. For example, in a recent merger, a team was debating whether to adopt Lotus Notes or Outlook as the standard email system. It's an interesting discussion, but in the short term it's not a value-creator for the combined company.

We all have choices to make, as individuals and as managers of organizations. What can you do to make sure that those choices are based on value rather than volume?"

YouTube - CFA Exam Prep: Level 3 Preformance Evaluation

A couple of you have mentioned studying for the CFA, here is a one of many good videos to help your process.


YouTube - CFA Exam Prep: Level 3 Preformance Evaluation: "CFA Exam Preformance Evaluation."

Motivational DNA by Tamara Lowe: the #1 female motivational speaker in the world: Get Motivated! The New Science of Achievement: http://www.getmotivatedbook.com

As part of a "get to know you" exercise, I would like to do an experiment this year. I want each of you in class to take this test and email me the result page. It takes about 10 minutes (maybe less) and gives you (and me) a better understanding of what motivates/demotivates you.

HOPEFULLY, I can then tailor the class a bit more to you.

Motivational DNA by Tamara Lowe: Get Motivated! The New Science of Achievement: http://www.getmotivatedbook.com

BTW this is in no means an endorsement of the book, speaker, or even the method, but it is a low cost experiment that could be useful and if not has very little risk involved.

Duration hedge of bond portfolio [practice, market] | Bionic Turtle

Two good duration questions:

Duration hedge of bond portfolio [practice, market] | Bionic Turtle:

"...highlight the deficiency of a duration-based hedge: if it’s one-time (i.e., not dynamic rebalancing), then we know it has limited efficacy because duration (by definition as a first partial derivative and single risk factor) assumes a small, parallel shift in the yield curve. A one-time hedge (as below) can hardly be expected to perfectly immunize the bond portfolio - David"

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:"