|
Best Newsletter Ever!, CAPM revisited, Pay Matters, New Blog, and much m
|
Jim Mahar
|
Aug 17, 2004 10:36 PDT
|
Best Newsletter Ever!, CAPM revisited, Are employees bad owners?,
Loyalty matters, and SO MUCH MORE!
FinanceProfessor News August 17, 2004
**********************************************************
FinanceProfessor.com
Bringing the Real World to the Classroom and vice versa!
Sign up for the free Newsletter at www.FinanceProfessor.com
**********************************************************
Top Stories
**********************************************************
1. Blog and New format
2. Can your stock price be too high? YES
3. A new look at Executive compensation
4. CAPM Revisited and dead?
5. Employees may make poor owners (pun intended)
6. Loyalty and the conglomerate discount
7. When a bubble is not a bubble
8. You should worry about endorsee’s performance
9. Retirement planning
10. Return on equity may not be as reported
**********************************************************
Wow. I am really excited about this newsletter. Indeed it may be the
best one I have ever edited. There are many great articles. Including
some that will make a big impact in the class room!
Also as promised there is a new format for the new semester! The new
newsletter is a bit shorter but with links to stories already covered on
the FinanceProfessor.com blog.
http://financeprofessorblog.blogspot.com/
I definitely recommend that you use the blog. It is the probably the
future of the newsletter. As many of you know we have been having a
great deal of difficulty emailing the newsletter out. Most schools have
spam blocking software that often catches the newsletter (for example
Penn State, Drexel, UCLA, Chicago to name a few). Blogging is a way
around it. (see more below)
Anyways, I will get out of your way and let you get down to the good
stuff!
Let me know what you think! Thanks!!!
jim
JimM-@FinanceProfessor.com
***********************************************************
A look at blogging
***********************************************************
What is a blog? A blog is nothing more than an easy to update website.
This has taken the idea of a journal. (for example, :
“A blog is basically a journal that is available on the web. The
activity of updating a blog is "blogging" and someone who keeps a blog
is a "blogger." Blogs are typically updated daily using software that
allows people with little or no technical background to update and
maintain the blog. Postings on a blog are almost always arranged in
chronological order with the most recent additions featured most
prominently.”www.matisse.net/files/glossary.html
What makes blogs so cool?
Blogs are
1. easy to use.
2. often informal
3. can be read either online with a typical web browser or with special
readers.
4. links can be saved (so rather than saving the whole newsletter, you
can link just to the stories you want!)
5. are immune to spamblockers
For example, to read the FinanceProfessor.com blog with your browser,
merely click through to it like you would any web site.
http://financeprofessorblog.blogspot.com/
But it can also be read with a special reader. This is called
syndication. Why is this so valuable? Because the reader will go and
“get articles” whenever the site is updated. This allows me to update
the blog on an almost daily basis and you can select which stories you
want. Moreover, since your reader is getting the article, you have made
it around the spam blocking software.
I have provided links to sign up via ATOM, RSS, or through your “my
Yahoo” page. There are several free RSS readers and while I do not
pretend to know which is best, I use RSSReader from RssReader.com and it
very easy to use.
http://www.rssreader.com/
Here is the list from Google:
http://www.google.com/search?sourceid=navclient&ie=UTF-8&q=free+rss+readers
I hope this helps! BTW I was turned on to this format by several
subscribers but want to especially thank Eric Briys for his help in
getting me started.
***********************************************************
Corporate Finance
***********************************************************
WOW is all I can say for these. There are some simply great articles.
(can you tell I am teaching corporate this semester? Almost all of
these will make it to class :) )
If you are only going to click through to one article in this entire
newsletter, make it this one! Jensen’s 1986 Free Cash flow paper showed
that too much cash is bad. Now he shows that a stock price can be too
high. Why? “A stock price that is overvalued is caused when investors
have overly optimistic expectations. Thus, if the investors were to
learn the truth, the stock price would fall. This creates an incentive
to hide information from investors. Moreover, to keep the stock price
high, management may be willing to take more chances and further hide
the bad results.”
http://financeprofessorblog.blogspot.com/2004/06/ssrn-agency-costs-of-overvalued-equity.html
Do takeovers destroy wealth? Yes, according to Moeller, Schlingemann,
and Stulz. They report that ‘from 1991 to 2001, acquiring firms’
shareholders lost an aggregate $216 billion.”
http://financeprofessorblog.blogspot.com/2004/08/do-takeovers-destroy-wealth-for.html
Study after study finds that how we pay people influences what the
people do. Hence executive compensation is always an important topic.
Not surprisingly in the “post-corporate governance crisis” era, it is
getting more attention. Jensen, Murphy, and Wruck do a phenomenal job
presenting how executive pay has changed and then give some great
recommendations. A must for class!
http://financeprofessorblog.blogspot.com/2004/08/ssrn-remuneration-where-weve-been-how.html
Dividends reduce agency costs. Dividends reduce cash on hand. I bet
you knew that. What you might not know is that DeAngelo, DeAngelo, and
Stulz find: “had the 25 largest long-standing dividend-paying industrial
firms in 2002 not paid dividends, they would have cash holdings of $1.8
trillion (51% of total assets), up from $160 billion (6% of assets), and
$1.2 trillion in excess of their collective $600 billion in long term
debt. Absent dividends , these firms would have huge cash balances and
little or no leverage, vastly increasing managers' opportunities to
adopt policies that benefit themselves at stockholders' expense."
http://financeprofessorblog.blogspot.com/2004/07/dividend-policy-agency-costs-and.html
I love this one! Employees may not make good owners after all!
Faleye,Mehrotra,and Morck study firms where there are large blocks of
employee owned shares that ARE VOTED. Their findings may surprise some
people: "Relative to otherwise similar firms, labor-controlled publicly
traded firms invest less, take fewer risks, grow more slowly, create
fewer new jobs, have worse free cash flow problems, and exhibit lower
labor and total factor productivity."
http://financeprofessorblog.blogspot.com/2004/07/ssrn-when-labor-has-voice-in-corporate.html
Might managerial ability and effort influence capital leverage? Yes
according to
Cadenillasa, Cvitani and Zapatero (CCZ) in an upcoming Journal of
Financial Economics (JFE) paper. Their model, which is probably too
complex to use in most undergraduate classes, separates managers based
on ability level. The authors conclude that “levered stock seems to be
the optimal compensation for high-type managers, while unlevered stock
is optimal for low-type managers
http://financeprofessorblog.blogspot.com/2004/07/leverage-decision-and-manager.html
You can fool some of the people some of the time, but you can not fool
the bond market! Lim, Mann, and Mihov find that using operational
leases as a means of keeping debt off the balance sheet may fool bond
rating agencies, but it does not seem to fool the bond market
http://financeprofessorblog.blogspot.com/2004/06/ssrn-market-evaluation-of-off-balance.html
S-Corp? C-Corp? LLC? Partnership? Proprietorship? With so many
choices of organizational forms, it pays to do your research before
making the plunge. In the Journal of Financial Planning, Opiela
discusses the choice of organizational form with financial planners.
Very good!
http://financeprofessorblog.blogspot.com/2004/07/fpa-journal-focus-according-to-form.html
Ok, let me see if I have this right. Size does matter and smaller is
better? Faleye reports that large boards of directors are less likely
to replace existing CEOs and if the CEO replaced, less likely to find a
successor from outside the firm. Moreover, when firms announce smaller
boards, the firm's stock return is positive. Thus Faleye concludes:
"suggest that a large size hinders the board's ability to perform its
monitoring functions, and lends additional support to the current drive
toward smaller boards."
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=498285
The number of directors serving on 5 or more Boards of Directors is
falling, but Forbes reported that 12 people still are serving on 12 S&P
500 boards. Why a problem? Time and conflicts of interest.
http://financeprofessorblog.blogspot.com/2004/08/how-many-boards-does-director-serve-on.html
*******************************
Mini-lesson: A look at the Diversification Discount
*******************************
Gonenc, Kan, and Karadagli make use of an interesting data set to give
more confirmation to the view that external capital markets are more
efficient than internal capital markets. They "compare the performance
of firms affiliated with diversified business groups with the
performance of unaffiliated firms." They find that "having a group
affiliated bank affects the accounting performance measures of the group
firms positively, but the market value of the group affiliated firms
negatively, supporting the misallocation of capital hypothesis." This
missallocation is often cited as a partial cause of the diversification
discount.
http://financeprofessorblog.blogspot.com/2004/07/inefficiency-of-internal-capital.html
Are you loyal to your company? Your answer may depend on whether your
company is a single division company or a conglomerate. Cohen writes
"Evidence from Social Psychology suggests that loyalty to the firm
develops at the divisional level." Yeah yeah, so what does Social
Psychology have to do with finance? A great deal! For instance, Cohen
suggests that if loyalty somehow shows up in investment portfolios, it
is probably through overweighting shares in your own firm. Thus, the
hypothesis that employees at "stand alone" divisions invest more in
company stock than do employees at conglomerate firms. Also wages may
be higher where there is little loyalty! (gee, that would explain many
things!)
http://financeprofessorblog.blogspot.com/2004/07/do-we-have-new-explanation-of.html
***********************************************************
Investments
***********************************************************
No doubt many of you (myself included) will dutifully report to our
students that the historical average return for large stocks is about 1%
which corresponds to a risk premium of around 8%. (keeping math simple
;) (see virtually any investment text for these numbers)) However,
Dimson, Marsh, and Staunton report that this is probably an overly
optimistic number. Not because the expected equity risk premium is
expected to fall in the future because the market is currently
overvalued as those in the Campbell-Schiller camp believe (although it
may be), but because we are not looking at the right historical returns!
So what is wrong? Virtually every finance text book dutifully reports US
equity returns from 1926 to the present. However, this is a period where
the US stock market was a very strong performer. Dimson, Marsh, and
Staunton do two things to adjust for this: 1. they go back further--to
1926 and 2. they look at global returns and not just US returns. Their
findings? Stocks have had lower returns and higher risks.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=476981
http://financeprofessorblog.blogspot.com/2004/07/another-look-at-retirement-planning.html
What killed the CAPM? While there may not be enough evidence to
pronounce a court sentence, a leading candidate is the inflation
illusion. Cohen, Polk, and Vuolteenaho “ show that an implication of
this joint hypothesis is that the security market line (the relation
between an asset’s average return and its CAPM beta) is steeper [i.e
there is a larger risk premium] than predicted by the Sharpe-Lintner
CAPM when inflation is low or negative. Conversely, when inflation is
high, the security market line is shallower [i.e. there is a smaller
risk premium] than the Sharpe-Lintner CAPM’s prediction.”
Another MUST read!
http://financeprofessorblog.blogspot.com/2004/08/ssrn-how-inflation-illusion-killed.html
For more on the CAPM, please look at the work by Fama and French who
provide a great review and discussion of CAPM with all of its
limitations.
http://financeprofessorblog.blogspot.com/2004/06/ssrn-capital-asset-pricing-model.html
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=440920
The debate as to the merit of behavioral finance is a hot one. Brav,
Heaton, and Rosenberg discuss the debate over behavioral finance and
conclude that neither side is totally correct.
http://financeprofessorblog.blogspot.com/2004/08/ssrn-rational-behavioral-debate-in.html
Wael looks at abnormal returns following overnight earnings
announcements of French firms. The findings give several insights into
market efficiency. Probably the most convincing aspect of Wael’s paper
is that the stock price moves on new information. While that is obvious,
it is interesting to see exactly how this price change occurs. For
instance the stock price change happens for both good and bad earnings
announcements, but not for earnings that are "in line" with analyst
forecasts. This is obviously consistent with semi-strong form
efficiency.
http://financeprofessorblog.blogspot.com/2004/07/reaction-speed-good-news-is.html
There has been quite a bit of evidence of late that all shareholders do
not do equal jobs of monitoring management. For example find that
private placements (which have been long seen as a means of improving
monitoring) may actually reduce monitoring and help to entrench managers
because many of those purchasing the blocks are not actively monitoring
management. Qiu dives into this question further and finds evidence that
suggests that large public pension funds (PPF) may do a better job
monitoring than insurance or mutual funds
http://financeprofessorblog.blogspot.com/2004/07/ssrn-which-institutional-investors.html
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=471720
In a very interesting article, Lee, Liu, Roll, and Subrahmanyam (LLRS)
provide convincing evidence that all investors are not the same and that
a dividend clientele effect does exist.
http://financeprofessorblog.blogspot.com/2004/07/proof-of-clientele-effect-evidence.html
Malloy and Zhu have a working paper that "provide[s] evidence that
individual investors located in less affluent, less educated, and ethnic
minority neighborhoods invest more in mutual funds with expensive load
fees." Which I would wager that you would all have expected. A more
interesting question (and much more difficult to answer) is why is this
so!
http://financeprofessorblog.blogspot.com/2004/07/is-it-where-you-live-or-how-much-you.html
With the Olympics going on, it is a good time to wonder what happens to
sponsoring companies’ stock prices when the athletes they sponsor win
big competitions (or correspondingly are arrested). Drewniak, Russell,
and Mahar (yeah that is me) have looked at this and we find that the
stock price goes up for good performances and down for bad. So maybe
that marketing thing really does influence spending decisions.
http://financeprofessorblog.blogspot.com/2004/07/look-at-what-happens-when-sport-stars.html
Men and women may not be that different after all when it comes to
investing. Previous literature suggested that men were bigger risk
takers etc. New work by Deaves, Luenders, and Luo may cause us to
reexamine that finding.
http://financeprofessorblog.blogspot.com/2004/07/are-men-and-women-that-different-when.html
Pastor and Veronesi conclude that the NASDAQ was not necessarily
overvalued in the late 1990s. Possible the best way to understand their
work is in the spirit of real option analysis where the more uncertain
the future, the greater the value of the option (or in this case stock).
This is important because "The NASDAQ stock prices in the late 1990s
were not only high but also highly volatile, and both facts are
consistent with high uncertainty about average profitability." Using a
model valuation model that incorporates this uncertainty the authors
conclude that "Nasdaq prices at the peak of the 'bubble' are
justifiable." Things that make you go MMM?
http://financeprofessorblog.blogspot.com/2004/07/blowing-way-bubbles-maybe-nasdaq.html
***********************************************************
Financial Institutions and Markets
(also Money and Banking)
***********************************************************
It has long been assumed that sooner or later the NYSE would become more
electronic. Earlier this month the world's most famous stock market
decided that there is no time like the present and announced that the
NYSE would become more of a hybrid market with both electronic and floor
trading. (a definite “class-note changer!”)
http://financeprofessorblog.blogspot.com/2004/08/nyse-to-increase-electronic-trading.html
Gemmill and Thomas have explored the link between governance and closed
fund performance. They found that "for the 331 funds listed in London,
returns are negatively related to expense ratios". Moreover, "expense
ratios are higher for funds which have large boards, less outside
directors and low ownership by the managers. The main conclusion is that
companies with small boards and more outside directors perform better.
http://financeprofessorblog.blogspot.com/2004/07/ssrn-does-governance-affect.html
In a related article, the SEC is trying to require independent Board
Chairs for mutual funds.
http://www.forbes.com/technology/ebusiness/feeds/ap/2004/06/23/ap1429627.html
You can now sell on a downtick. Well at least you can temporarily and
for some stocks. The SEC approved a one year trial (starting in January
2005 that will remove many of the short sale restrictions for "one-third
of the stocks in the Russell 3000." However, for other stocks it may
actually be more difficult since the SEC also has made the rules against
naked short selling (shorting without first borrowing the shares) more
restrictive.
http://www.nytimes.com/2004/06/24/business/24place.html?dlbk
http://financeprofessorblog.blogspot.com/2004/06/new-york-times-new-rule-on-short.html
***********************************************************
International Finance
***********************************************************
Well it took a long time, but finally the first purely Islamic Bank is
set to open in the UK. Of course, traditional British banks have been
offering some "products tailored for Muslims."
http://financeprofessorblog.blogspot.com/2004/08/bbc-news-business-first-islamic-bank.html
Home field advantage: Lambeau Field, Adelphia Coliseum, Reilly Center,
Cameron Indoor Stadium, and the Korean Stock Market? Choe, Kho, and
Stulz “show that foreign money managers pay more than domestic money
managers when they buy and receive less when they sell for medium and
large trades.”
http://financeprofessorblog.blogspot.com/2004/07/home-field-advantage-finance.html
Maybe rationality can not explain everything in investments. Morse and
Shive find that patriotism (and not just transaction costs) helps to
explain why investors overweight investments in their home country, i.e.
the home country bias.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=406200
***********************************************************
Economics
***********************************************************
A look at the US economy shows as much uncertainty as a look at the
Buffalo Bills upcoming season! After examining the good and the bad, I
make my fearless predictions. (9-7 for the Bills, slow growth for the
US economy).
http://financeprofessorblog.blogspot.com/2004/08/what-will-us-economy-do-probably-more.html
***********************************************************
Personal Finance: Retirement planning
***********************************************************
You are planning your retirement and want o know how much you can take
out each year. My advice is to not ask me (I won’t say) but to
diversity and take out as little as possible. Fortunately Ahmet Tezel
in the Journal of Financial planning comes to the rescue! Using
bootstrapping he looks at (A)how much diversification is needed (B) how
much the investor can withdraw per year.
http://financeprofessorblog.blogspot.com/2004/07/fpa-journal-contribution-sustainable.html
http://www.fpanet.org/journal/articles/2004_Issues/jfp0704-art7.cfm
Are stocks the way to go? Maybe, but beware of the risks and returns!
Dimson, Marsh, and Staunton report that “although the probable rewards
from equity investment are attractive, stocks did not and cannot offer a
guaranteed superior performance over the investment horizon of most
investors. Furthermore, their prospective returns are lower than many
investors project, whereas their risk is higher than many investors
appreciate. Investors who assume that favorable equity returns can be
relied on in the long term or that stocks are safe so long as they are
held for 20 years are optimists. Their optimism is irrational."
http://financeprofessorblog.blogspot.com/2004/07/another-look-at-retirement-planning.html
Note this is also cross listed in Investments
So what is one to do? My favorite idea comes from Zvi Bodie who applies
modern hedging theories to retirement planning. As he wrote in in 2001
Retirement Planning: a New Approach paper the first part of the plan is
to assure some minimum standard of living (this is the minimum amount
that you will need) by investing in "inflation-protected bonds and
annuities as the way to guarantee a minimum standard of living in
retirement."
http://financeprofessorblog.blogspot.com/2004/07/another-look-at-retirement-planning.html
***********************************************************
Energy Markets
***********************************************************
Are you as sick of hearing about higher oil prices as I am? Well, if
Business Week is correct, we should expect even higher prices soon.
Demand has increased and production is limited. The limit has been
brought about not so much by OPEC but by lack of investment in the past,
political turmoil, and only partially because of OPEC's production
limits. With this little excess, any small problem would quickly be
magnified and it would lead to even higher oil prices.
http://financeprofessorblog.blogspot.com/2004/08/bw-online-august-9-2004-oil-prices.html
***********************************************************
Derivatives
***********************************************************
Why are commodities so important? They play an important role in
diversifying a portfolio. For instance, Rouwenhorst and Gorton find that
"While the risk premium on commodity futures is essentially the same as
equities, commodity futures returns are negatively correlated with
equity returns and bond returns."
http://financeprofessorblog.blogspot.com/2004/08/ssrn-facts-and-fantasies-about.html
***********************************************************
Accounting News
***********************************************************
It really is a simple rule. If you change accounting policies, tell
people about the change. Halliburton did not. You should!
http://financeprofessorblog.blogspot.com/2004/08/todays-accounting-lesson-tell-people.html
International Accounting standards are becoming more standardized, but
there is still a long ways to go.
http://financeprofessorblog.blogspot.com/2004/08/new-york-times-financial-times.html
Don’t you love it when things go as planned? I really would not know,
but from what I read it is a great feeling ;) Carnaghan and Sivakumar
find evidence that shows that regulation FD did reduce information
Asymmetries. Additionally they "find that the information disclosed by
managers has improved in terms of frequency, specificity and verifiable
information provided." And therefore " Regulation Fair Disclosure has
achieved one of its stated goals of providing a more level playing field
to all investors." YEAH! :)
http://financeprofessorblog.blogspot.com/2004/06/ssrn-effects-of-regulation-fair.html
***********************************************************
Follow-up on past stories
***********************************************************
As you no doubt have seen elsewhere, so I will not really report much on
either, Martha Stewart was sentenced to five months of jail time.
http://news.bbc.co.uk/1/hi/business/3900401.stm
The Adelphia Trial ended (sort of). John and Timothy Rigas were found
guilty. The case against Michael Rigas ended in a mistrial and is
scheduled to restart in October..
http://financeprofessorblog.blogspot.com/2004/07/msnbc-michael-rigas-fraud-case-ends-in.html
***********************************************************
Of interest to students
***********************************************************
How was your summer? Did you have an internship? If so was it paid?
With many internships being unpaid, the NY Times is questioning whether
this is a form of unintended discrimination where only those wealthy
enough to afford a summer of no pay can afford to take the internships.
http://financeprofessorblog.blogspot.com/2004/08/new-york-times-washington-crucial.html
At the start of the semester it is a perfect time to start working in
your resume and looking for that dream job or internship (maybe even a
paying one!) Here are some resume tips.
http://www.free-resume-tips.com/10tips.html
http://www.damngood.com/jobseekers/tips.html
http://www.rockportinstitute.com/resumes.html
http://resume.monster.com/
***********************************************************
Teaching Ideas
***********************************************************
Feel free use either the FinanceProfessor.com newsletter or the Blog in
class. They are great ways to stay current and also to have a bit of
fun!
On the first day of class, have the students tell you a bit about
themselves. I have them turn in a one page “bio” with contact info,
their finance experience, and even what they like and dislike. It is a
great way to get to know your class! Also tell your students about you!
It is a two way street ;)
***********************************************************
What I am reading
***********************************************************
Oh the list is so long since the last newsletter I will not list them
all, but some of what I have read/am reading include:
The Da Vinci Code. Yes everyone on the face of the earth has read it,
so I had to too. It is good. In fact a very good story. Sure there
are flaws (see Amazon’s reviews, most are true), but it was definitely
worth the price of admission! FTR I hate reading books that I am not
sure what is true and what is not true. Hence I found the second link
useful. It lists factual errors in the book and has more pictures of
what is in the book
http://www.amazon.com/exec/obidos/ASIN/0385504209/finpapers/104-9378365-5272442
http://www.lisashea.com/hobbies/art/davincicode.html
Possibly my favorite book of the last month was The Glory of their
Times. It is a fascinating look (listen) at Baseball in the 1900-1920
era. It is a series of interviews with star players done in the early
to mid 1960s when Lawrence S. Ritter was writing his book of the same
name. This is just the collection of the actual interviews. It is
really cool to see what has changed (salaries, willingness to play
through injuries, homeruns, and relief pitching) and things that have
not changed (past players thinking they were better, drugs and alcohol
wrecking careers, and extremely competitive players who make the sport
great. Highly recommended!
http://www.amazon.com/exec/obidos/ASIN/1565112539/finpapers/104-9378365-5272442
I am almost done with The Teammates by David Halberstam. Good but not
great. It is the story of Johnny Pesky and Dom DiMaggio’s trip to
Florida to see a dying Ted Williams. But it is more a story of the
lives of the three (plus Bobby Doerr who could not make the trip). Very
interesting, but not quite up to expectations.
http://www.amazon.com/exec/obidos/ASIN/1401397476/finpapers/104-9378365-5272442
Chris Carmichael’s Food for Fitness. Yes he is Lance’s coach. I like
it. He has some very good ideas. For example, just as your training
changes from season to season, so too do your nutritional needs. Which
is obvious, but often overlooked.
http://www.amazon.com/exec/obidos/ASIN/039915194X/finpapers/104-9378365-5272442
I finally finished Teller of Tales, the biography of Sir Arthur Connan
Doyle by Daniel Stashhower. It was good. I really enjoyed most of it,
but the end when it focused so much on Spiritualism dragged on for a
while. But overall, I am really glad I read it and I learned a ton.
http://www.amazon.com/exec/obidos/ASIN/0805066845/finpapers/104-9378365-5272442
I also finished Hallowed Grounds: a Walk at Gettysburg by James
McPhearson. Sure it was too short, and informal, but I liked it. I
wish I had ristened to it BEFORE this recent trip to Gettysburg.
http://www.amazon.com/exec/obidos/ASIN/0739306812/finpapers/104-9378365-5272442
I have just started two finance books. I will mention them both again
in coming months.
The first is Worry Free Investing by Zvi Bodie and Michael Clowes. It
is largely the idea mentioned in the retirement planning section: using
options and risk free bonds to protect your retirement. The second is
Covered Calls and Naked Puts by Ron Groenke (edited by Wade Keller). It
is like their 2002 book the Money Tree, but correctly points out that
this is not risk free.
http://www.amazon.com/exec/obidos/ASIN/0130499277/finpapers/104-9378365-5272442
http://www.amazon.com/exec/obidos/ASIN/0967412897/finpapers/104-9378365-5272442
*************************************************************
Quotes
*************************************************************
If you want to do something, do it! ---Plautus
The way to get ahead is to start now---William Feather
We are all richer than we think we are---Michel de Montaigne
Happiness comes from within…, from some curious adjustment to
life---Hugh Walpole
No traveler has ever reached that blest abode who found not thorns and
briers in the road---William Cowper
*************************************************************
I hope you all have a great semester and that somehow the newsletter,
blog, and financeprofessor.com site helps you! If you have ideas for
future content or would like one of your own papers reviewed, please let
me know. (an internet link to the paper is a must!)
Thanks for reading!
If you have any ideas for the site, blog, or the newsletter please let
me know.
Jim
JimM-@FinanceProfessor.com
Who has been very disappointed with the weather we have had this summer.
Very cool, cloudy, and wet.
Who has given up on the Mets for this year. I hate to say it, but if
there is an American League team who wants Piazza, it may be time for a
trade. From what I have seen, first base is not his calling.
Who is cutting back a bit on biking. Time to concentrate on running
again. Maybe a triathlon next year? Stay tuned!
BTW check out my pictures! They are of what I did (outside of finance)
this summer :)
http://www.flickr.com/photos/financeprofessor/
*************************************************************
Oh and a final favor…pass this on to someone you think would like it….a
fellow student, a past teacher, your current teacher, your parents,
anyone who it might help. Thanks!
Thanks for forwarding this so much. That is the only way I know this
newsletter is growing so fast. :-)
*************************************************************
copyright 2004 FinanceProfessor.com
|
|
 |
|
