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Posts Tagged ‘stock’

Should "TailSpotting" Be on Your Stock-Research Checklist?

From a new working paper by David Yermack, an economist at NYU/Stern, called “Tailspotting: How Disclosure, Stock Prices and Volatility Change When CEOs Fly to Their Vacation Homes” (abstract; older version in PDF):

This paper shows close connections between CEOs’ vacation schedules and corporate news disclosures.  I identify vacations by merging corporate jet flight histories with real estate records of CEOs’ property owned near leisure destinations.  Companies disclose favorable news just before CEOs leave for vacation and delay subsequent announcements until CEOs return, releasing news at an unusually high rate on the CEO’s first day back.  When CEOs are away, companies announce less news than usual and stock prices exhibit sharply lower volatility.  Volatility increases immediately when CEOs return to work. 

The Best Trader in the World Worked for Bernie Madoff

The night Bernie Madoff got caught for running a $60 billion Ponzi scheme I got a call from my friend “Eddie” (not his real name) who for many years worked for Madoff. I couldn’t tell if he was crying but he was very upset. “I can’t believe it,” he said, “Bernie was like a father to me. Mark Madoff was like a brother to me.” We spoke on and off all night as more news came in and he came to grips with the new world he was living in.
I called Eddie yesterday and said I wanted to write an article about him and how I thought he was the best trader I ever knew. I’ve met and worked with over a thousand traders. I traded for hedge funds. I ran a fund of hedge funds. I’ve written five books on trading. And Eddie is the best trader I’ve ever come across.

Putting the "I" in "IPO"

Cathal Morrow, who’s in the midst of a year without unhappiness following his year without lying, has a new project: “Me Me Me Plc, a company he plans to float on the London Stock Exchange by selling shares in himself. It’s ?10 a share, which gets you a photograph of Cathal in lieu of a share certificate.”

Looking to Twitter for a Market Edge?

If you’re looking for a hot stock tip, consider Twitter. A new paper by Timm O. Sprenger and Isabell M. Welpe looks at the effects of microblogging on stock prices.

Recanting a Small Part of Lifecycle Investing

On page 9 of Lifecycle Investing, Barry Nalebuff and I write:
“[B]efore you invest in stocks, first pay off all your student loans and credit card debts.”
On reflection, we were only half right. You should pay off your high-interest-rate credit card loans before investing in stock. But in this post from our Forbes blog, Barry and I show why young investors need not pay off their student loans before investing in stock.

The Quiet Danger of Non-Inflation-Adjusted Stock Returns

In today’s Wall Street Journal, E.S. Browning has written a quietly important article (gated) about the fact that stock-market returns are almost never adjusted for inflation. While most shrewd investors factor in this omission, my sense is that a great many people never think about it, and therefore significantly overestimate their investment gains.

Are the Lakers a Sure Thing?

For the 20-year period ending in 2007, the Los Angeles Lakers’ NBA championship record did a surprisingly good job of reflecting the stock market.

Fantasy Stocks

For those who are still too scared to invest in the stock market, you can buy some imaginary stock at UpDown, a “practice investing” site that simulates the stock market and lists real-life companies without meting out real-life consequences.

More Good News

Just before Christmas, I reported that the CBOE‘s Volatility Index (^VIX) had fallen from “an apocalyptic 80 percent” to a merely extraordinary 45 percent.
And I said:
When it drops below 30 percent, it will be a strong indication that the market correction is complete and we’re back to business as usual.
Happily, we’re going to get a chance to see if I was right.

If You Like Indicators, Keep Your Laggards and Leaders Separate

So much of the casual conversation I hear about the direction of the economy is downright confused — not only because the economy is legitimately confusing, but because people don’t know what metrics to keep their eye on, and especially because they jumble their leading and lagging indicators. This Associated Press article on the state of the stock market reminds . . .

FREAK Shots: Grave Imagery

Blog reader Dan Ciruli emailed us this photo from a California cemetery as another candidate for a recession magazine cover: Dan Ciruli It may be prematurely optimistic, but after last week, should it look more like this? If you have a Freak-worthy photo of your own, send it along here.

Quantifying the Nightmare Scenarios

Dartmouth’s Eric Zitzewitz is one of my favorite co-authors, and a whiz at tracking financial markets. And when he mentioned to me last week that a close look at the options markets told an interesting tale of fear, I asked him to share his observations. Here goes. Quantifying the Nightmare Scenarios By Eric Zitzewitz A Guest Post There’s no shortage . . .

Investment Tips for Retirees Worried About Inflation

As I was getting coffee in the faculty lounge, I started talking to a senior colleague who is nearing retirement. He said that he avoided a lot of the market pain of the last year because he had only about 25 percent of his savings in stock. (Now with the market drop, he has an even smaller percentage!) But his . . .

Good Economic News for the Holidays: Volatility Is Down

One of the most important but underreported financial indicators is the CBOE‘s Volatility Index (^VIX), which measures the market’s expectation of future volatility in stock prices. (The CBOE has written a nice technical white paper describing how it is calculated, here.) Traditionally, the annualized volatility of the S&P 500 has been 20 percent, but last month when I went to . . .

The Forever Portfolio

The Forever Portfolio, spotted this week in the Nashville airport. Our friend James Altucher has a new book out, The Forever Portfolio, which is an investment book — the subtitle is “How to Pick Stocks That You Can Hold for the Long Run” — but it is also full of James Altucher stories about poker-playing and idea-generating and other stuff, . . .

A Sports-Star Stimulus Package?

Taiwan’s major newspapers charge a higher advertising rate on days when Yankees right-hander and Taiwan native Chien-Ming Wang pitches, Sports Illustrated reports. Computer maker Acer claims Wang’s name increased its product sales by 10 percent, and the Taiwanese business journal Money Weekly attributed a 25 percent rise in the Taiwan Stock Exchange to Wang’s strong performance last June and July. . . .

Another Reason for Lousy Stock Market Reports

Dubner recently questioned whether there’s much (or anything) to be learned from stock market news. A paper by University of Michigan political science professor Arthur Lupia and his students points to a major reason stock stories lack substance: “Point blindness,” or what happens when news reports and citizens don’t realize that the value of a stock index point changes frequently. . . .

Place Your Stock Bets Here

At its heart, Inspectd is a simple game: it shows you a chart of historical data on a random stock, asks you to bet on whether the stock’s price will rise or fall, and then immediately tells you if you won or lost — with another performance chart showing you why. And maybe that instant gratification is what makes this . . .

The FREAK-est Links

Lowenstein on Bernanke (Earlier) (More here) Which company insiders are buying a lot of their own stock? How does pregnancy affect memory? What’s the value of melancholia?