Equity Investments Valuing Young Growth Companies Webcast Professor Aswath Damodaran addresses the challenges and risks of valuing young growth companies, including their typically limited histories, small revenues along with big operating losses, and propensity for failure. More Not So Smart: How Executives Spend Their Company’s Cash CFA Digest Recent evidence for S&P 500 Index companies seems to confirm studies that show that companies are bad at timing their share buybacks and too optimistic about equity market returns for their pension plans. More What Makes Stock Prices Move? Fundamentals vs. Investor Recognition Financial Analysts Journal The authors demonstrate that investor recognition dominates stock price movements over short horizons, whereas fundamentals dominate over longer horizons. More Resolving Implementation Issues Facing Emerging Market Investors Webcast Donald Lindsey, CFA, examines different risks in emerging market portfolios and explores the use of ETFs as part of an emerging markets portfolio strategy. More Rethinking the Equity Risk Premium Webcast Many investors regard the past decade as an unusual one for market returns. One of the key features of this turbulent period is the renewed uncertainty about what may be the most important measure in all of finance — namely, the equity risk premium. More Quantitative Equity Portfolio Management CFA Institute / SDA Bocconi School of Management - 12-15 June 2012 This program in Milan, Italy, focuses on quantitative tools and techniques to build and manage tactical equity portfolios. More Valuing Young Growth Companies Not So Smart: How Executives Spend Their Company’s Cash What Makes Stock Prices Move? Fundamentals vs. Investor Recognition Resolving Implementation Issues Facing Emerging Market Investors Rethinking the Equity Risk Premium Quantitative Equity Portfolio Management From the 65th Annual Conference BNN Clip: We Don’t Rate Countries, We Rate Governments Says Fitch Ratings’ David Riley 17 May 2012 Fitch's group managing director of sovereign and supranational ratings discussed his outlook for Europe and the United States in an interview with BNN's Business Day. Read More View all From the Blog Just Released: CFA Magazine (May/June 2012) Jennifer Curry 21 May 2012 Will a currency war lead to a collapse of investor confidence? This issue's cover story examines the possible outcomes. Read more → Irrational Exhuberance Redux? Greenspan Says Stocks Are Cheap David Larrabee, CFA 18 May 2012 Critics of former U.S. Federal Reserve Chairman Alan Greenspan’s tenure at the Fed — there’s no shortage — may well consider his bullish call on stocks a contrary indicator. Read more → So You Want to Invest in Facebook, Do You? Good Luck with That Matt Orsagh, CFA, CIPM 16 May 2012 In the run-up to Facebook’s IPO, Matt Orsagh, CFA, examines some of the shareowner rights challenges Facebook investors would face. Read more → View all Recently Posted Educational Resources AllEventsPublicationsWebcasts/PodcastsOnline LearningRethinking the Equity Risk PremiumMany investors regard the past decade as an unusual one for market returns. One of the key features of this turbulent period is ...Lessons From Capital Market HistoryThis session will challenge you to unlearn what you have learned by examining such topics as: What’s Going On with Mr. ...Lessons From Capital Market HistoryThis session will challenge you to unlearn what you have learned by examining such topics as: What’s Going On with Mr. ...CFA Institute / INSEAD: Global Investors WorkshopDiscover how the newest practices in asset valuation, portfolio construction, and investment firm management can work for your ...Hordes of HoardersThe author explores the historically elevated $1.7 trillion of cash that has accumulated on U.S. company ...Not So Smart: How Executives Spend Their Company’s CashRecent evidence for S&P 500 Index companies seems to confirm studies that show that companies are bad at ...How the Growth Outliers Do ItThe author asks the questions, How many companies grow revenues by 5% or more each year over a 5- or 10-year ...Lessons of the 1930s: There Could Be Trouble AheadThe global financial crisis could have resulted in economic devastation equivalent to that brought on by the Great Depression. ...Stock Market Interdependence, Contagion, and the U.S. Financial Crisis: The Case of Emerging and Frontier MarketsThe recent steep decline in global equity markets was a severe and unexpected event. Although the decline started in the United ...Does the Wealth Profile of a Company Matter in Discounted Cash Flow Analysis? Valuation Implications for Investors and ManagersThe author examines whether a company’s ability to create shareholder value matters in the stock market’s discounting of future ...Tails, Fears, and Risk PremiaPrior research has tended to estimate the equity risk premium (ERP) and the variance risk premium (VRP) separately. The authors ...Bank ShotsU.S. and global banks face “one of the most challenging operating environments in history.”Large Foreign Ownership and Firm-Level Stock Return Volatility in Emerging MarketsThe authors investigate changes in the volatility of emerging market stocks after foreign investors have made large investments. ...What Segments Equity Markets?The authors examine whether globalization and financial openness have narrowed the differences in valuation between equity ...Market Drivers: Fundamentals vs. TechnicalsIs the market driver by fundamental factors, technical factors, or a mix of both?What Does Equity Sector Orderflow Tell Us about the Economy?The authors study the impact of orderflow on the macroeconomy. They suggest that relative price changes do not reflect all ...Earnings Conference Calls and Stock Returns: The Incremental Informativeness of Textual ToneCorporate disclosures are increasingly being announced via quarterly earnings conference calls. In addition to factual ...Tactical Equity Investing across Bull and Bear MarketsThe authors investigate the effect that the market state, as defined by a moving average benchmark, can have on popular stock ...Lost Economic Time: The Proust IndexThe Economist has constructed a measure to determine how much economic progress has been undone by the financial crisis. The ...Asset Growth and Future Stock Returns: International EvidenceThe authors found strong return predictive power for measures related to asset growth in the MSCI World Universe. The predictive ...Why Track Inefficiency?Challenging index design practices, the authors explore why an equally weighted version of the S&P 500 Index is a more ...The Emerging Equity Gap: Growth and Stability in the New Investor LandscapeSurveying the future of global assets, the authors forecast that emerging economies will nearly double their proportion of global ...Jump on the Post–Earnings Announcement DriftThe authors examined the potential profitability of a strategy that exploits the post–earnings announcement drifts contingent on ...Inside the Opening AuctionThe opening auctions at the NYSE and NASDAQ are integral to providing liquidity for both traders and passive investors. Some ...CFA Institute / SDA Bocconi School of Management: Quantitative Equity Portfolio ManagementThe Quantitative Equity Portfolio Management program focuses on quantitative tools and techniques to build and manage tactical ...Korea Investment Conference Korea’s financial market has been anything but stable, but then whose has? Pervasive global problems such as European sovereign ...CFA Institute / Saïd Business School: Oxford Private Equity Programme The Oxford Private Equity Programme examines the economics driving the private equity sector and the financing models it ...CFA Institute / Harvard Business School: Investment Management WorkshopLegendary among investment executives for transforming investment thinking and firm management over the past four decades, the ...ESG Information and ValuationLouise O’Halloran shares her views on increasing recognition and availability of information on environmental, social, and ...Comment Letter to SEC on NYSE Proposal to Establish a Retail Liquidity Program – Amendment No. 2Demographic Changes, Financial Markets, and the Economy In this webinar, the authors discuss the link between demographic transitions and both GDP growth and capital market returns. ...Equity Investing: How to See Beyond the UncertaintyJames Kieffer, portfolio manager with Artisan Partners, will address the long-term prospects for equities versus other asset ...Exchange-Traded Funds: Investor Challenges and OpportunitiesAnthony Chan discusses China research insights from an exchange-traded fund (ETF) perspective, finding liquidity in the search ...Africa and Frontier MarketsRuna Alam discusses the growing role of frontier markets in the global economy and how investors can assess the challenges and ...Resolving Implementation Issues Facing Emerging Market InvestorsDonald Lindsey, CFA, discusses different risks in emerging market portfolios, including liquidity, currency, execution, leverage, ...The Next Major Trend in Emerging EconomiesArjun Divecha reviews the recent stages of economic development in emerging economies and discusses how economics and ...The Impact of Basel III on Financial MarketsWill a combination of structural flaws and illogical mathematically inconsistent rules make matters worse?After the EuroFrom invalid derivatives to all-out currency war, worst-case scenarios abound.How Index Trading Increases Market Vulnerability The authors found that the rise in popularity of index trading—assets invested in index funds reached more than $1 trillion at ...Information Uncertainty and the Post–Earnings Announcement Drift in Europe Investigating the effect of earnings announcement abnormal return and of abnormal trading volume on future returns for a large ...Up!Hardest hit by the 1997–98 Asian financial crisis, Indonesia has overcome political turbulence and other problems to become a ...What Makes Stock Prices Move? Fundamentals vs. Investor Recognition The authors synthesized and extended recent research demonstrating that investor recognition is a distinct, significant ...Managing Emerging and Frontier Market Small-Cap Portfolios: Opportunities and RisksNick Padgett, CFA, offers his take on information availability and mispricing in the areas of security analysis, valuation, and ...Advanced Risk and Portfolio Management Bootcamp - ARPM BootcampThe six-day course provides in-depth understanding of buy-side modeling from the foundations to the most advanced statistical and ...Evolving Emerging Market StrategiesJohn Calamos, Sr., chief executive officer of Calamos Investments, will address evolving trends in emerging markets as well as ...The Information Content of the S&P 500 Index and VIX Options on the Dynamics of the S&P 500 IndexThe authors seek to determine whether information about options on the ChicagoBoard Options Exchange Volatility Index (VIX) aids ...Currency Hedged Benchmark Replication: Challenges and ImprovementsThe authors document the limitations and challenges of using currency-hedgedbenchmarks in the assessment of the performance of ...Momentum in Japan: The Exception That Proves the RuleThe author studies the “failure” of the momentum strategy in Japan.He finds that the failure, which occurred only in Japan, does ...Hedging Equity Market Risk in Hedge Fund Investing: A New ApproachThe prevailing wisdom in the investment industry before the financial crisis wasthat hedge fund performance was largely immune to ...Resolving the Presidential PuzzleThe authors examine the link between stock returns and the presidential cycle inthe United States. They investigate whether there ...Comment Letter to the European Parliament ECON Committee: Questionnaire on MiFID / MiFIR IIThe Leadership Gap“The investment industry community will be well served to develop more rigorous analytical tools to determine ...How Do You Know When You're Done?“If you are looking at a company for the first time, you may find that reading all the company releases, U.S. SEC filings, and ...Informed Traders: Linking Legal Insider Trading and Share RepurchasesLogic suggests that a link might exist between insider trades and share repurchases because of their ...Demographic Changes, Financial Markets, and the Economy Using a large sample of countries and 60 years of data, the authors found a strong and intuitive link between demographic ...CFA Institute: Fifth Annual European Investment ConferenceAs the flagship event in Europe for CFA Institute, the annual European Investment Conference brings together noted researchers, ...Global Market Sentiment Survey 2012 The 2012 Global Market Sentiment Survey analyzes responses to a November, 2011 survey of over 58,000 CFA Institute members ...Why Diversification is Alive and Well: A Multi-factor Investment ApproachWith global markets marked by volatility and uncertainty, proper asset allocation and diversification will be critical to ...Risk Management for Institutional Funds Many investment managers agree that the traditional approach to asset allocation and risk management is “dead.” No consensus has ...Rethinking the Equity Risk Premium In 2001, a small group of academics and practitioners met to discuss the equity risk premium (ERP). Ten years later, in 2011, a ...Positioning Portfolios for the Long Term Richard Bernstein examines global markets on an investor level, detailing the differences between investor expectations and ...The Most Important Thing: The Human Side of InvestingHoward Marks, CFA, discusses a right-brain approach to investing and how risk control is the hallmark of an investment ...Comment Letter to SEC on NYSE Proposal to Establish a Retail Liquidity ProgramThink Differently: Off-the-Grid Economic IndicatorsNicholas J. Colas discusses why traditional economic indicators are inadequate tools for valuation and how investors can adjust ...Conversation with a Veteran Value InvestorJean-Marie Eveillard explains the concepts of value investing and how they have evolved over time. Valuing Young Growth CompaniesProfessor Aswath Damodaran explains that good investors of all stripes care about value, and while traditional value investors ...Analyzing Valuation Measures: A Performance Horse-Race Over the Past 40 YearsIn this article, the authors compare the investment performance of portfolios sorted on different valuation measures and find ...The Case for Investing in Africa (Take 15 Series) Clifford D. Mpare, CFA, explains why Africa is an attractive market for investors. The Take 15 Series is a series of short ...Investment Opportunities in Africa: Potential Winners Clifford D. Mpare, CFA, discusses which African nations have the most improved macro environments and how these factors can ...ROE: The Wrong Performance Measure for Banks (Take 15 Series)Robert Jenkins, FSIP, cites the flaws in the traditional Return on Equity (ROE) measure in measuring bank financial performance ...Dark Pools and Market Transparency (Take 15 Series)Frédéric Romand discusses the role of dark pools and their relative merits and drawbacks in the context of equity market ...Short Arbitrage, Return Asymmetry, and the Accrual Anomaly Previous research has found a negative correlation between high accruals and future stock returns: the accrual anomaly. The ...Predicting Financial Distress and the Performance of Distressed Stocks The authors examine financially distressed companies’ common stock performance and discover low share prices, high levels of ...When Two Anomalies Meet: The Post–Earnings Announcement Drift and the Value–Glamour AnomalyThis study of the post–earnings announcement drift and the value–glamour anomaly finds that value stocks have greater information ...Farewell, Punch Bowl: From Inflation Targeting to Credit Targeting The approach to money, credit, and asset prices that investors have used for the past 20 years is now defunct and has to change ...The Impact of International Institutional Investors on Local Equity Prices: Reversal of the Size PremiumUsing comprehensive company-level ownership data from Japan, the authors found that the equity size premium correlates strongly ...An Alternative Measure of the “World Market Portfolio”: Determinants, Efficiency, and Information Content The market portfolio is usually defined as an aggregate of individual assets. The authors develop a new approach to building a ...The New Financial Matchmakers The author examines the benefits and potential of private market networks (PMNs). The main purpose of PMNs is to allocate ...Algorithmic Trading Usage Patterns and Their Costs Algorithmic trading has grown dramatically and now accounts for about 30 percent of institutional trading. The authors examine ...Volatile Earnings Growth, the Price of Earnings and the Value Premium The relationship among an asset’s price, present earnings, and the anticipated growth of the earnings is well established. The ...Barron’s Red Flags: Do They Actually Work? A 2009 Barron’s article identifies several phrases companies use in their U.S. SEC filings that should raise red flags for ...Inflation and the Stock Market: Understanding the Fed ModelThe authors confirm the Fed Model's established correlation between the yield on nominal bonds and the dividend yield on ...Do Investors Value Dividend Smoothing Stocks Differently? The authors find that investors place a higher value on stocks of firms that distribute smooth dividends; that institutional ...Introduction to Residual Income Equity Valuation Course In this course, you will learn the concept of residual income and how it is applied in equity valuation. You will also learn the ...A Survey of Alternative Equity Index StrategiesJoin Jason Hsu for an evaluation of popular alternative equity index strategies offered to investors. He explains how the ...Equity Market Valuation: A CFA Institute Investment Series Lecture Valuation is not just a matter of finding a number; rather, it is trying to bracket a "range of reasonableness." This ...Holey Grail: How Much Capital Do Lenders Need?An estimate by The Economist of the amount of capital needed by European banks to ensure against a domino-effect collapse. The Relative Valuation of US Equities at Bear Market Bottoms: A Perspective on the Equity Risk PremiumThe authors examine equity returns, earnings growth, interest rates, and the relative valuation of US equities following the 22 ...Murdering Mr. Market: An Equity Valuation and Capital Allocation Model for Long-Term Value-InvestorsThe authors present an equity valuation and capital allocation model that is based on the investing principles of long-term ...WACC: Definition, Misconceptions and ErrorsThe author examines the weighted average cost of capital (WACC) within the context of firm valuation and addresses common ...Time Value of Money: The Essence of Securities Valuation In today’s world of complex structured securities, valuing these securities can seem a daunting task. However, if one stands ...Towards Integrated Reporting: Communicating Value in the 21st CenturyIntegrated reporting is designed to enhance and consolidate existing reporting practices and to move towards a reporting ...Chain ReactionDue diligence on supply-chain management offers clues about future performance.Agree or DisagreeCertain African markets will replace the BRIC markets as the next great global investment opportunity.Firehoses, Drinking Fountains, and Intrinsic ValueFour experts discuss the challenges of identifying key share-price drivers amid the torrent of “excruciating minutiae.”A Survey of Alternative Equity Index Strategies After reviewing the methodologies behind the more popular quantitative investment strategies offered to investors as passive ...Decomposing Global Equity Cross-Sectional VolatilityThe authors present an exact methodology for decomposing cross-sectional volatility into contributions from various factors. ...To Trade or Not to Trade? Informed Trading with Short-Term Signals for Long-Term InvestorsWhen long-term investors trade slowly changing portfolios, they are not particularly sensitive to when they should place or ...Comment Letter to IOSCO Consultation Report on Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and EfficiencyWhere the Black Swans Hide & the 10 Best Days MythThe author examines financial market outliers to determine their effect on long term portfolio performance, and addresses the ...Managing Volatility of Emerging Markets Bud Haslett, FRM, CFA, and Matthew T. Moran present an overview of implied and historic volatilities for key emerging markets, ...Expert Networks: Linking Expert Mouths with Eager EarsThe author describes the uses and possible abuses of expert network companies. The potential for the conveyance of illegal ...Beyond Brinson: Establishing the Link between Sector and Factor ModelsThe authors show that the Brinson model, which is used for return attribution analysis, is a special kind of factor model. This ...Does Corporate Governance Predict Future Performance? Evidence from Hong KongThe authors use time-series data for Hong Kong companies to study how changes in the quality of corporate governance practices ...Alternative Trading Systems in Europe: Trading Performance by European Venues Post-MiFID, 2010 UpdateThe authors compare the 2010 equity trading costs of alternative European trading systems (dark pools and multilateral trading ...Corporate Governance, Valuation, and Performance: Evidence from a Voluntary Market Reform in BrazilThe authors construct an index of proxies for six good governance practices used by companies included in a premium segment of ...Equity Prices and Macroeconomic Fundamentals: International EvidenceThe author studies the interrelationship between stock prices and macroeconomic fundamentals for selected European countries and ...The Importance Of Dividends and Buybacks Ratios For Gauging Equity Values The author considers the impact of dividends and share repurchases on investors, making the case for a ratio which aggregates the ...Into the Abyss: What If Nothing is Risk Free?A key assumption in corporate finance and investment analysis is the existence of a risk-free investments, but this assumption ...Rogers of Ariel Investments Is Bullish on Equities (Take 15 Series) John W. Rogers, Jr. discusses his 30 years of investment experience and compares today’s markets with those of the early ...Superior Risk Management through Value Investing (Take 15 Series) Charles K. Bobrinskoy describes how Ariel Investments puts Buffett value investing principles to work. The Take 15 Series is a ...Author Insights: Larry Speidell, CFA, on Frontier Markets Author Larry Speidell, CFA, discusses his recent monograph, Frontier Market Equity Investing: Finding the Winners of the Future, ...High-Frequency Trading, Flow Toxicity, and the Flash Crash (Take 15 Series) At the Asian Finance Association Conference in Macao SAR, China, Dr. Maureen O’Hara, an expert in market microstructure and ...Does the Stock Market Distort Investment Incentives?Do agency problems (from the separation of ownership and control) cause public companies to invest suboptimally? In a ...The Race to ZeroThe author considers the dramatic impact that high frequency trading has had on the financial markets and discusses potential ...Sol SurvivorsAnalyzing clean tech’s dirty little secrets.Identifying Characteristics to Predict Separately Managed Account PerformanceThe authors analyzed a large sample of domestic equity separately managed accounts over the 1991–2009 period and found ...The Limits to Arbitrage Revisited: The Accrual and Asset Growth AnomaliesUsing idiosyncratic volatility as a proxy for arbitrage costs, the authors found that the highly publicized accrual and asset ...What Factors Drive Analyst Forecasts?Using survey data to judge how analyst forecasts are related to evaluations of companies’ industry competitiveness, strategic ...Analysts’ Forecasts: What Do We Know after Decades of Work?The author observes that recent research on sell-side analysts has focused disproportionately on analysts' ability to accurately ...Certificate in Quantitative Finance - OnlineThe Certificate in Quantitative Finance (CQF) is a six-month part-time course for individuals working in, or intending to move ...Best Practices for Equity Research AnalystsJames J. Valentine, CFA, presents some insights from his recently published book, Best Practices for Equity Research Analysts. He ...How Are Asian Financial Institutions Impacted by Changing Accounting and Regulatory Regimes? (Take 15 Series) Yin Toa Lee, CFA, reviews the new global regulatory initiatives and changing accounting standards and their business impacts on ...Asian Financial Institutions under the New Accounting RegimeYin Toa Lee, CFA, provides an overview of the various recent accounting standards changes from the FASB and IASB, as well as the ...What Fama and French’s Latest Research Doesn’t Tell UsThis article provides a primer of Fama-French's seminal work on the size and value effect in the context of a recent working ...An Investigation into Stewardship: Engagement between Investors and Public Companies, Impediments, and Their ResolutionIn the aftermath of the global financial crisis, the role of investors in overseeing the performance of boards and executive ...China's Capital Markets: The Changing LandscapeThis report reviews the evolution of China's equity, bond, and derivatives markets and how the investor mix is changing. It also ...China's Capital Markets: The Changing Landscape (Chinese Version)The Chinese version of this report reviews the evolution of China's equity, bond, and derivatives markets and how the investor ...66th CFA Institute Annual ConferenceThe risk, opportunities, and challenges facing the global investment profession are as complex as ever and investment ...Asset Price BubblesWerner DeBondt discusses the elements of bubble psychology and behavioral asset pricing, focusing on euphoria and hysteria ...Adding Value through Values: The Evolution of Sustainable and Responsible Investing (SRI)Julie McDowell discusses sustainable and responsible investing (SRI) and how it fits into investment strategies, differences in ...Wall Street Revalued (Take 15 Series) Andrew Smithers discusses why the U.S. equity market is currently overvalued and argues that central banks should be encouraging ...Predatory Trading, Crowded Exits, and Other Unusual Risks in Short SellingJames B. Clunie, CFA, ASIP, examines the vulnerabilities of short sellers that many investors and firms fail to recognize ...Introduction to Industry and Company AnalysisCh. 9, Investments: Principles of Portfolio and Equity Analysis, Michael G. McMillan, CFA, Jerald E. Pinto, CFA, Wendy Pirie, ...Equity Market ValuationCh. 11, Investments: Principles of Portfolio and Equity Analysis, Michael G. McMillan, CFA, Jerald E. Pinto, CFA, Wendy Pirie, ...Investing in Private EquityTim Jenkinson offers a recap of private equity fundraising since the 2007–2008 peak and examines valuation levels, performance, ...Managing Unquantifiable Portfolio Risks: Politics, Policy, and GeopoliticsPippa Malmgren discusses the importance of understanding the relationship between inflation and recent geopolitical developments. ...Analyst Following of Privatized Firms around the World: The Role of Institutions and Ownership StructureThe authors analyze factors that affect analysts’ decisions to initiate coverage on newly privatized firms and that determine the ...Does Algorithmic Trading Improve Liquidity?The authors analyze whether algorithmic trading has increased the efficiency and liquidity of the NYSE. They examine the ...Frontier Markets: What the Headlines Don’t Tell You“We need to distinguish ‘hot,’ emotionally charged news from ‘cool’ stories that can be very rewarding for ...Liquidity Level or Liquidity Risk? Evidence from the Financial Crisis Although generally considered safe assets, liquid stocks underperformed illiquid stocks during the financial crisis of ...Frontier Market Equity Investing: Finding the Winners of the FutureFrontier markets represent a multitude of distinct cultures and can be overwhelming to investors. The author examines the many ...Arbitrage Risk and Stock MispricingThe authors challenge the widely accepted notion that stock prices reflect fundamental values because deviations cause arbitrage ...Estimating the Equity PremiumThe authors estimate the equity premium by using a simulated method of moment approach that incorporates multiple moments of U.S. ...Methods of Valuation: Myths vs. RealityThe author surveys actively practicing financial analysts about their use of enterprise value to earnings before interest, taxes, ...Seasonality in the Cross Section of Stock Returns: The International EvidenceThe authors examine short- and long-term seasonal anomalies in international stock returns to determine linear predictability and ...Value, Valuation, and the Long-Run Performance of Merged FirmsThe authors examine whether mergers lead to post-acquisition changes in the intrinsic value of the acquiring companies. They find ...What’s Vol Got to Do with It?The authors examine the role of return variance in determining asset prices. They identify the variance premium as a measure that ...International Diversification Works (Eventually) Critics of international diversification observe that it does not protect investors against short-term market crashes because ...When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10-KsThe authors examine 10-Ks from 1994 through 2008 for textual tone by counting words that are generally considered negative. They ...When Are Analyst Recommendation Changes Influential?The consensus in the financial literature is that individual analyst recommendation changes do not significantly impact a stock’s ...A Simple Empirical Model of Equity-Implied Probabilities of DefaultThe authors calibrate an updated model for default prediction that improves on Altman’s Z-score model and Z″ model. The new model ...Cooking the Books: Recipes and Costs of Falsified Financial Statements in ChinaThe authors examine companies in China that issued financial restatements. They find that restatements are more common when the ...To Time or Not to Time? How Best to Structure an Emerging Markets Investment ProgramGeorge R. Hoguet, CFA, analyzes whether investors should allocate strategically or tactically to emerging markets and whether ...Portfolio Management and Geopolitical RiskJames G. Rickards discusses the principal geopolitical risks affecting investors today and how to integrate these risks with ...Expected Returns: An Investor's Guide to Harvesting Market RewardsAntti Ilmanen discusses expected returns of stocks, bonds, and alternative investments in the context of growth, inflation, ...Geopolitical Risks and Trends (Take 15 Series)Kevin Kajiwara discusses the global investment implications of current geopolitical trends and risks. The Take 15 Series is a ...The 3-D Hurricane: Finding Opportunities in Challenging Markets Robert Arnott describes a daunting capital market environment that will struggle to perform in the face of three challenges: ...NetherlandsThis report contains a brief summary of the rights shareowners enjoy in the Netherlands market. The report ...AustriaThis report contains a brief summary of the rights shareowners enjoy in the Austria market. The report also ...SpainThis report contains a brief summary of the rights shareowners enjoy in the Spain market. The report also ...ThailandThis report contains a brief summary of the rights shareowners enjoy in the Thailand market. The report also ...IrelandThis report contains a brief summary of the rights shareowners enjoy in the Ireland market. The report also ...Are You Trading Predictably? The authors find predictable patterns in stock returns. Stocks whose relative returns are high in a given half hour today ...Intermarket Analysis in the Age of Global InterdependenceSector analysis and fundamental analysis ought to have a complementary relationship.Investing in India’s Emerging ResilienceIndia has emerged from the 2008 financial crisis barely scathed and with a very bright future. Foreign ...Comment Letter to IOSCO on Issues Raised by Dark LiquidityThe Short View: Stock Picking Poised to ReturnAfter approaching record highs in the summer of 2010, correlations between stocks comprising the S&P 500 index have fallen ...Reflections on Decision Making and CounterintuitionMichael J. Mauboussin discusses the role of technical competence, “counterintuition,” and the application of multiple mental ...Comment Letter to European Commission on the Review of the Markets in Financial Instruments DirectiveSingaporeThis report contains a brief summary of the rights shareowners enjoy in the Singapore market. The report also discusses current ...Asset Growth and Stock Returns: Evidence from Asian Financial MarketsResearch has shown a negative relationship between asset growth and stock returns in the United States. The authors ...Cross-Sectional Return Dispersion and Time Variation in Value and Momentum PremiumsThe authors study the relationships between stock return dispersion and the subsequent premiums for value and momentum ...Helping Hand or Grabbing Hand? Central vs. Local Government Shareholders in Chinese Listed FirmsThe authors analyze related-party transactions between Chinese-listed companies and their state-owned shareholders. ...Investment Issues in Emerging Markets: A ReviewEmerging markets have generated considerable interest among investors and academics. Although their returns ...Empirical Evidence of the Existence of Investable Premiums in Emerging Market Investable StocksThe author examines the impact of the level of investability on stock returns across emerging markets. Results indicate ...Ten Questions Every Institution Should Ask Their Dark Pool ProvidersThe authors survey users of dark pools and posit that institutional investors “blindly” engage in dark liquidity pool ...Can Operating Leverage Be the Cause of the Value Premium?The authors provide support for theoretical models of the value premium by demonstrating a positive and significant ...What Does the Individual Option Volatility Smirk Tell Us about Future Equity Returns?The authors examine the predictive ability of the volatility smirk on future equity returns. They discover that the ...Short Sellers and Financial MisconductThe authors find that short sellers are able to identify and focus on companies that misrepresent their financial ...Excess Cash and Stock ReturnsThe author researches the relationship between excess cash holdings and future stock returns and finds that high excess ...A Cautionary Note about Robert Shiller’s CAPEThe author evaluates why the cyclically adjusted price-to-earnings ratio (CAPE)may be biased, including changes in the ...Investments: Principles of Portfolio and Equity AnalysisIn a world of specialization, no other profession likely requires such broad, yet in-depth knowledge than that of financial ...Good Investment Fund Limited: Equity InstrumentsThis publication contains an illustrative set of financial statements of "Good Investment Fund Limited" for the year ...Valuation Inferno: Dante Meets DCF – Avoiding Common Mistakes in Valuation AnalysisAswath Damodaran discusses input traps and inconsistencies of discounted cash flow (DCF) valuation and describes the 10 most ...Criticisms of Traditional DCF Analysis (Take 15 Series) Professor Aswath Damodaran discusses current approaches to valuation, particularly discounted cash flow valuation. He also ...Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs (a review) This book provides a highly accessible and pragmatic approach to the subject of investment vehicles. For the relative newcomer ...The Structure, Regulation, and Transparency of European Equity Markets under MiFID The structures of trading venues operating in Europe are examined, and trade data are analysed to determine the transparency of ...Asymmetric Changes in Stock Prices and Investor Recognition around Revisions to the S&P 500 Index This study finds that first-time additions to the S&P 500 Index or its family experience permanent price increases; however, ...Demand and Supply and Their Relationship to Liquidity: Evidence from the S&P 500 Change to Free Float In the context of the switch to free-float weighting in the S&P 500 Index, this study of the effect of the availability of ...The Proper Care and Feeding of Great AnalystsDo great analysts possess specific skills and knowledge?The Impact of a Family Business on Managing Wealth This is an archived recording of a live event that took place on 16 December 2010. Panelists discuss which analytical approach ...Best Practices for Equity Research Analysts: Essentials for Buy-Side and Sell-Side AnalystsJames J. Valentine, CFA provides a professional guide for equity analysts, focusing on best practices for identifying and ...Investing in Turbulent TimesJavier Estrada examines historical equity returns, both in absolute terms and relative to bonds, providing context for the poor ...Exploring the Frontier Emerging Equity Markets Frontier markets offer the potential for high returns to investors who are willing to take the risk and be patient. About 85 ...Conversation with a Value Guru Value investing requires creativity, focus, and fortitude. Value investors concentrate on the long term and look for companies ...NYSSA Water Utilities Conference WebcastsIncreases in global water demand, combined with escalating supply challenges, will continue to drive the need for improved water ...Institutional Trades Around Takeover Announcements: Skill vs. Inside InformationThe authors examine the pattern and profitability of institutional trades around takeover announcements, and find that the trades ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 1 - Geroge FulopAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 6 - Nicholas LandekicAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 7 - Kevin QuinlanAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 8 - Jack TalleyAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 9 - Leslie BrowneAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 4 - Craig A. DionneAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 5 - Craig DeesAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 2 - James ManusoAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 3 - Spiro RombotisAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...Relative Valuation: Improving the Analysis and Use of MultiplesAswath Damodaran presents an approach for analyzing and using multiples (e.g., price-to-earnings and enterprise-value-to-EBITDA ...Fundamentals versus MomentumFred Speece, Jr., CFA, explores the underlying motivations of investors’ “herding” instincts, as well as the rewards offered to ...The ABCs (and Ds) of the Search for Value Donald Coxe discusses endogenous and economic risks and presents his ABCs of equity investing today: aurum (gold), bonds, and ...Case Studies in Valuation: Health Care Industry Analysis and More Kenneth H. Shubin Stein, CFA, explores the health care sector, including applications of valuation approaches and the effects on ...Value Investing Perspectives (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Conversation with a Veteran Value Investor Charles T. Akre, Jr., and Fred H. Speece, Jr., CFA, discuss reliable valuation approaches and explain how to determine earnings ...Opportunities and Challenges in Eastern European Markets (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Predicting Stock Market Returns with Aggregate Discretionary AccrualsThe authors build on research that shows that aggregate operating accruals positively predict aggregate future stock returns. ...Not All Buybacks Are Created Equal: The Case of Accelerated Stock Repurchases The authors documented the characteristics and market performance of ASR (accelerated share repurchase) stock. They found that ...Is A Better than B? How Affect Influences the Marketing and Pricing of Financial Securities Culture and experience associate A with superior quality. In the marketing of dual-class IPOs, issuers are mindful of this ...Are Member Firms of Corporate Groups Less Risky?The authors examine Japanese keiretsu companies and the impact that such a corporate group structure has on company-level and ...Expected Volatility, Unexpected Volatility, and the Cross-Section of Stock ReturnsThe authors decompose idiosyncratic volatility into an expected component and an unexpected component and study the relationship ...Misdeeds Matter: Long-Term Stock Price Performance after the Filing of Class-Action Lawsuits Consistent with theory, this study of shareholder litigation found a broad transformation in company characteristics and risk ...Net Operating Working Capital Behavior: A First LookWorking capital policies reflect a company’s operating and financial conditions and environment. The authors seek a better ...Liquidity and Market Efficiency: A Large Sample StudyThe authors extend previous studies to examine short-horizon return predictability from past order flows. They use a ...Sell-Side School TiesThe authors test whether analysts who have an educational link with management at public companies make better recommendations ...A Reexamination of the Causes of Time-Varying Stock Return VolatilitiesThe author examines the daily return volatility of stocks during 1976–2006. He finds that the increase in volatility before 2000 ...Why Valuation Must Continue to Evolve Times of turbulence are excellent opportunities to analyze the weaknesses of applied theories. Information Transfer Effects of Bond Rating DowngradesThe authors research the impact of corporate bond rating downgrades on the equity prices of other corporations in the same ...The Behaviour of Small Cap vs. Large Cap Stocks in Recessions and RecoveriesThe author examines the relative performance of small-cap versus large cap stocks surrounding periods of peaks and troughs of ...Security Valuation and Risk Analysis: Assessing Value in Investment Decision MakingKenneth S. Hackel, CFA challenges popular valuation tools and conventions and introduces a credit-based valuation methodology ...Russia: Where It Came From, Where It Is Now, and Where It's GoingAt a CFA Society of Cleveland event, Timothy Enneking reviews Russia’s current economic situation and its post-crisis position in ...Career Chat: Trading Desk Research Wall Street trading desks, the traditional habitat of the desk analyst, are in a state of flux as the largest firms scramble to ...China Capital Markets Development and Implications for Wealth OwnersAaron Low, CFA, discusses recent developments and outlook for the A-shares, B-shares, H-shares, REIT, and related markets, as ...Writing Securities Research: A Best Practice Guide, Second EditionJeremy Bolland provides securities analysts with a useful guide to best practices for their craft. Readers will learn how to ...NYSSA Construction and Materials Conference: Part 1 - Jack Kasprzak The recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 2 - Donald JamesThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 3 - Barclay SimpsonThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 4- Louis GriesThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 5 - Daryl SandsThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...Mongolia Investment Conference: Part 3 - Douglas McGayMongolia is expected to become one of the world’s fastest growing economies over the next decade thanks to its immense resources ...Will New Law Require U.S. Banks to Bolster Their Capital?Standard & Poor's analysts discuss the impact of the new Dodd-Frank Law on bank capital standards and discuss how Standard ...Do Sell-Side Stock Analysts Exhibit Escalation of Commitment?The authors offer evidence that when an analyst makes an out-of-consensus forecast of a company’s quarterly earnings that turns ...Lessons from LehmanCan investors learn the right lessons from Lehman’s collapse and better detect warning signs?Disclosing Environmental RisksBy making the financial impact of environmental risks tangible, the BP disaster may accelerate disclosure trends.Everything a Young Charterholder Should Know About EnergyWill the challenge of developing new and better sources of sustainable energy provide profitable investment opportunities?3-D Investing Most investment management approaches are categorized along two dimensions: market capitalization and investment style. Has the ...Cashing In on Managerial Malfeasance: A Trading Strategy around Forecasted Executive Stock Option Grants This study examined the profitability of a trading strategy that exploits the manipulation of stock prices around the grant date ...Opportunities for Patient InvestorsAt the CFA Institute 2010 Annual Conference in Boston, Jason Zweig sat down with legendary investor Seth Klarman to gain insights ...Not Just a Lot of Hot Air: Environmental Mandates, Renewable Energy, and the Regulated Utilities IndustryStandard and Poor's analysts discuss the outlook for environmental regulation including congressional and Obama administration ...Sales Order Backlogs and Momentum ProfitsMomentum profits are partially explained by changes in a company’s sales order backlog. Winner stocks have large positive ...The Long-Run Relationship between Stock Prices and Goods Prices: New Evidence from Panel CointegrationThe authors evaluate the long-run relationship between stock prices and goods prices and establish that stock investments provide ...Predicting Global Stock ReturnsTo avoid the biases that arise in ordinary least squares regressions for predicting global stock returns, the author uses panel ...Buy-Sell Agreements for Closely Held and Family Business OwnersBuy-sell agreements designed for private business owners to create a market and set a price for their ownership interests in the ...Liquidity and Valuation in an Uncertain WorldDuring the recent financial crisis, almost no trading took place among some financial assets, despite dealers posting bid and ask ...Low Volatility Equity Portfolios (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Style Timing with Insiders Aggregate demand by insiders predicts time-series variation in the value premium. Insider trading forecasts the value premium ...Relative Sentiment and Stock Returns The sentiment of retail investors relative to that of institutional investors was measured by comparing their respective ...Wealth Creation: A Systems Mindset for Building and Investing in Businesses for the Long Term (a review)Madden provides a systems mindset for analyzing businesses over the long term. He underscores the necessity of critically ...Comment Letter to U.S. SEC on Equity Market StructureBenjamin Graham: Building a Profession (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...The Role of Frontier Equity Markets in Portfolio Management (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Exploring the Frontier Emerging Equity MarketsIn this webcast, Cliff Quisenberry, CFA, defines frontier emerging markets and discusses the risks, rewards, and unique ...How Research from the High-Yield Market Can Enhance Equity Analysis Because equity analysts and high-yield analysts have different perspectives on valuation, insights from high-yield analysis can ...The Inefficient Market and the Potential Contribution of Behavioral Finance: Case ClosedContrary to majority opinion in university departments of finance, markets are not efficient; they are inefficient. Furthermore, ...Back to Basics: A Stock Picker’s MarketThe future will likely bring conditions that will constitute an excellent environment for stock pickers. History has shown that ...Comment Letter to CESR Regarding Review of Equity Markets under MiFIDThe Little Book of Big Dividends: A Safe Formula for Guaranteed Returns (a review)The author addresses dividends and how excess returns can be achieved through a simple and time-tested investment formula. He ...China: Separating Myth from RealityIn this podcast, Michael Kurtz discusses the structural bear case for Chinese equities, the renminbi and positioning a portfolio ...The Power of Negative Thinking: A Short Seller's Perspective In this webcast, James S. Chanos discusses the following: Understanding what makes a short seller’s approach to research ...Uncertainty's Reward: Issues and Opportunities in Healthcare Investing In this webcast, John L. Sullivan, CFA, discusses how investment opportunities within the healthcare and life sciences industry ...Identifying Accounting Shenanigans (Take 15 Series)In this episode, Howard Schilit reviews a few cases of accounting fraud and discusses techniques on how to identify accounting ...Give Us (Earnings) GuidanceThe Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...The S&P 500: More than 500 StocksIn this webcast, David M. Blitzer discusses the S&P 500, compares index protection strategies, and describes how the S&P ...Global Currency Hedging: What Role Should Foreign Currency Play in a Diversified Investment Portfolio?John Y. Campbell’s presentation analyzes seven major currencies and why only some provide an effective hedge against equity risk, ...Equity Return Performance from a Prediction Model of Meeting or Missing Analysts’ Forecasts The author proposes a model that captures the ability and incentives of managers to meet or exceed analyst forecasts along with ...Real and Financial Industry Booms and Busts The authors investigate whether competitive industries that experience valuation, investment, and financial booms are prone to ...Expected Stock Returns and Variance Risk Premia The authors develop a stylized model to show that the difference between implied and realized variation, which they call the ...Sovereign Wealth Funds’ Impact on Debt and Equity Markets during the 2007–09 Financial Crisis The authors found that news related to the financial crisis and sovereign wealth fund investments in U.S. and European firms not ...Return Predictability along the Supply Chain: The International Evidence In this study of a sample of equities listed on the exchanges of 22 developed countries, equity returns of customer industries ...Comment Letter to CESR on Micro-Structural Issues of the European Equity MarketsEconomic Growth and Equity InvestingIn this seminar, recorded on 21 April 2010, Bradford Cornell offers insights into likely future returns to equity investments. ...Practical Applications of Behavioral Finance for Institutional Investors In this podcast, Christopher Blum, CFA, discusses how to incorporate behavioral finance principles into equity investing, and ...The Financial Crisis: Impact on Theory and PracticeAt a Toronto CFA Society lunch event on 8 April 2010, Ralph Layman, CFA, president and chief investment officer of International ...Fundamental Analysis in the Middle East and Emerging Africa: Challenges and OpportunitiesIn this podcast, David P. Sanders, CFA, discusses the following: Overview of the equity investment opportunity set in the ...Benjamin Graham, Building a Profession: Classic Writings of the Father of Security Analysis This book showcases Graham’s important contribution to remaking investment analysis into a profession. It collects, for the ...Trade Management (Take 15 Series)In a brief interview, Theodore R. Aronson, CFA, discusses insights for trade management; how trading has become more ...Private Equity after the Credit CrisisThe Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Financial Interdependence in the World's Post-Crisis Capital Markets The Global Interdependence Center (GIC) partnered with the CFA Society of Philadelphia, the Federal Reserve Bank of ...Capital Gains Overhang and the Earnings Announcement Volume Premium This study examined why stocks that experience high abnormal trading volume around earnings announcements earn high returns. The ...Can Forecasting Work?Expertise and fancy job titles don’t impress fortune.On the Structure of Analyst Research Portfolios and Forecast Accuracy The authors examine the structures of U.S. and non-U.S. brokerage firms and find that the forecast accuracy of analysts who ...Revisiting Dividend Yield Dynamics and Returns Predictability: Evidence from a Time-Varying ESTR Model Unit root tests have shown that the dividend yield is nonstationary. The author proposes a time-varying exponential ...Are the Wall Street Analyst Rankings Popularity Contests? On an industry-wide basis, tremendous resources are expended to obtain an investment edge. Investment firms and the analysts ...The Price of Sin: The Effects of Social Norms on Markets Many social scientists believe that social norms are important in shaping economic behavior and market outcomes, overriding at ...Time-Varying Risk Premiums and the Output Gap The authors document a relationship between the output gap and U.S. stock returns. The relationship is both economically and ...Put Your Money Where Your Mouth Is: Do Financial Firms Follow Their Own Recommendations? Documented evidence generally shows that analyst recommendations add value in multiple ways: revealing new information, enabling ...Rewriting History The authors examine the Thomson I/B/E/S stock recommendations database for data inconsistencies from 2000 through 2007. Relative ...Share Repurchases and Stock Valuation Models The authors examine the impact of stock repurchases on stock valuation models. They find that valuation estimates derived from ...Clairvoyant Value II: The Growth/Value Cycle This article continues the authors’ study of “clairvoyant value.” They find that the market is good at identifying growth stocks ...Conflicts of Interest and Stock Recommendations: The Effects of the Global Settlement and Related Regulations The conflicts of interest in sell-side analysts’ research as a result of links between research and investment banking, the ...Media Coverage and the Cross-Section of Stock Returns After controlling for common risk factors, the authors find that stocks with no media coverage tend to earn higher returns than ...Aggregate Earnings and Asset Prices The authors attempt to clear up the misconception that aggregate earnings of companies are a diversifiable risk with no effect ...Economic Growth and Equity Investing The performance of equity investments is inextricably linked to economic growth. Nonetheless, few studies on investing have ...Why Does DCF Undervalue Equities? The authors examine the potential for weighted average cost of capital (WACC) calculations to be biased as a result of using the ...Stimulus, Liquidity, and Bubbles: Is China Leading the Global Economic Recovery? (Take 15 Series)In this episode, Jie Gan evaluates China’s role in the global economy. Letter to U.S. SEC on Sub-Penny Trading on Regulated ExchangesEquity Asset Valuation, Second Edition As part of the CFA Institute Investment Series, the Second Edition of Equity Asset Valuation has been designed for a wide range ...Has the U.S. Stock Market Become More Vulnerable over Time? This study demonstrates that the cross-sectional variation of systematic risk and systematic liquidity has increased from 1963 ...Economic Growth and Equity Investing The performance of equity investments is inextricably linked to economic growth. Nonetheless, few studies on investing have ...Implications for Asset Returns in the Implied Volatility Skew This study examined the impact on future asset returns of information contained in the implied volatility skew. Future returns ...Free Cash Flow Valuation Ch. 4, Equity Asset Valuation, Jerald E. Pinto, CFA, Elaine Henry, CFA, Thomas R. Robinson, CFA, and John D. Stowe, CFA (Wiley, ...Residual Income Valuation Ch. 5, Equity Asset Valuation, Second Edition, Jerald E. Pinto, CFA, Elaine Henry, CFA, Thomas R. Robinson, CFA, and John D. ...Equity Market Inefficiency (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Calculating Equity Risk PremiumsIn this session, Professor Aswath Damodaran discusses how to compute an equity risk premium using formulas derived from bond ...Rethinking BetaIn this session, Professor Aswath Damodaran discusses techniques for calculating company betas to improve valuation techniques. ...LiquidityIn this session, Professor Aswath Damodaran discusses how to think about and factor in company-specific liquidity in valuation ...GlobalizationIn this session, Professor Aswath Damodaran discusses how to account for country-specific risk when valuing equities. Please ...Reflections on Selecting Stocks from a Value MavenIn this podcast, Amit B. Wadhwaney discusses the following: Defining value investing Sector-specific due diligence ...Back to Basics: A Stock Picker's MarketIn this podcast, Jason DeSena Trennert discusses the following: Possible outcomes and unintended consequences of the ...Equity Investing for 2010 (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Equity Investing for 2010 ALSIn this episode, Steven M. Galbraith discusses the following: Equity values in the current economic environment ...Clairvoyant Value and the Value Effect The authors look at clairvoyant value, which is the future fair value of a stock. They examine a sample of stocks during the ...The Predictive Content of Aggregate Analyst Recommendations Studies have shown that changes to analyst recommendations help somewhat in predicting future returns at the company level. The ...Corporate Governance Ratings and Firm Performance Corporate governance has become an important factor in assessing company performance. Using ratings provided by three U.S. ...Profiting from a Contrarian Application of Technical Trading Rules in the US Stock Market The authors study the feasibility of profiting from simple technical trading rules from various market cycles after allowing for ...The “Best Corporate Citizens:” Are They Good for Their Shareholders? Business Ethics magazine publishes an annual listing of the “Top 100 Best Corporate Citizens.” Working together with KLD ...The Wages of Social Responsibility Typical socially responsible investors tilt their portfolios toward stocks of companies with high scores on social ...The Rise and Demise of the Convertible Arbitrage Strategy This article analyzes convertible arbitrage, one of the most successful hedge fund strategies. The aim of the strategy is to ...Global Systemic Risk: What We’ve Learned and the Way Forward The worldwide economy is experiencing a severe, synchronized, global recession. Aggressive policy decisions by several ...Price Trends and Patterns in Technical Analysis: A Theoretical and Empirical Examination The authors study the share-price effects of investors having a confirmation bias (i.e., the tendency to interpret new ...Cash Is King The direct cash flow method can increase transparency. Beyond Accounting Disclosure of extra-financial information is only the first step. Gender and Job Performance: Evidence from Wall Street This study concerns the relationship between gender and job performance among brokerage firm equity analysts. Women’s ...Using Auctions to Price Employee Stock Options: The Case of Zions Bancorporation ESOARS The first empirical analysis of Zions Bancorporation’s 2006 and 2007 auctions of Employee Stock Option Appreciation Rights ...The European Economy in the Global Financial CrisisIn this webcast, Martin Wolf gives an overview of the European economy in the global crisis. Download podcast version Generating Alpha in MENAIn this webcast, Khaled Abdel Majeed discusses the following: Characteristics of the MENA Region Capturing ...The End of the Crunch? The Credit Cycle and Asset Class ReturnsIn this webcast, Christian Gattiker-Ericsson, CFA, discusses the following: Where we are in the deleveraging process, and ...The Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis (a review)The technicians featured in this book come across as sincere in their belief that the patterns of past price movements contain ...Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions (a review) Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions is a handbook for aspiring investment ...Short-Sale Strategies and Return PredictabilityThe authors examine trading strategies used by short sellers of U.S. stocks listed on the NYSE and NASDAQ during 2005. Consistent ...Do Managers Withhold Bad News?The authors examine whether managers withhold or delay the release of bad news compared with good news. They conclude that, on ...Does Better Corporate Governance Result in Higher Valuations in Emerging Markets? Another Examination Using a New Data SetThe authors investigate the importance of corporate governance practices relative to company value by using a unique dataset. ...Stocks as Lotteries: The Implications of Probability Weighting for Security PricesBy applying cumulative prospect theory, the authors develop a model to determine equilibrium prices for assets that have skewed ...Dividends and Price MomentumA momentum strategy of buying winners and selling losers performs better with non-dividend-paying companies ...When Is Stock Picking Likely to Be Successful? Evidence from Mutual FundsConsistent with a costly arbitrage equilibrium in which arbitrage costs insulate mispricing, this study finds that mutual fund ...India: Opportunities and ChallengesIn this webcast, Arshad R. Zakaria discusses the following: Macro- and microeconomic factors to consider when investing in ...G ForcesHow can the quality and use of governance information be improved?The Outlook for Real Estate FundsWhat lessons can be learned from the 18-year real estate cycle, and where are the opportunities now?Does Freezing a Defined-Benefit Pension Plan Increase Company Value? Empirical Evidence This study empirically tests whether freezing or closing a defined-benefit (DB) pension plan increases the sponsoring company’s ...Liquidity and the Post-Earnings-Announcement Drift The post-earnings-announcement drift is a longstanding anomaly that conflicts with market efficiency. This study documents that ...The Wages of Social Responsibility Typical socially responsible investors tilt their portfolios toward stocks of companies with high scores on social ...Global Equity Investing (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ..."The Future of Ireland Inc.?" The Financial and Economic Questions Currently Facing Ireland“The Future of Ireland Inc.?” was a question-and-answer panel discussion hosted by CFA Ireland on 10 June 2009. The panel ...Fooling Some of the People All of the Time: A Long Short Story (a review)In Fooling Some of the People All of the Time: A Long Short Story, David Einhorn provides a detailed account of his short sale of ...Why Fundamental Indexation Might—or Might Not—Work In this seminar, Paul Kaplan, CFA, addressed how fundamental indexation challenges traditional market-cap indexing by suggesting ...Is the Trend Your Friend?Some traders look to seasonal patterns to improve options-trading profitability.The Pitfalls of Leveraged and Inverse ETFsUnderstanding how return volatility adversely affects wealth accumulation is critical.Know Your RightsA new manual enables global, cross-market comparisons of shareowner rights.Should Good Stocks Have High Prices or High Returns? Using a design involving a between-subjects experimental manipulation, this study surveyed 742 Finnish financial advisers about ...Do Security Analysts Reduce Noise? This study investigates the role of security analysts in reducing noise in stock price fluctuations. Using a sample of analyst ...Home-Biased Analysts in Emerging MarketsThe financial press has written much about conflicts of interest among sell-side analysts in developed markets. Little ...The Dog That Did Not Bark: Insider Trading and CrashesThe authors develop a model that suggests insiders sell based on private negative information but eventually stop ...Does Innovation Cause Stock Market Runups? Evidence from the Great CrashThe conventional view of the stock market at the end of the 1920s is that it was overvalued as a result of investor ...The Cost of Socially Responsible InvestingSocially responsible investing can be costly. The cost depends on manager skill, how stringently the manager defines ...Going Negative: What to Do with Negative Book Equity StocksThe authors evaluate the effect of negative book equity stocks on the value premium. They provide evidence that ...Investor Sentiment and Corporate DisclosureVoluntary disclosure of long-horizon earnings forecasts during the 1996–2004 period is used to examine whether ...ModelsThis article analyzes the methodology of modeling in the physical sciences and in finance. Whereas hobbyists’ models ...Do Investors Value Smooth Performance? Earnings smoothing arises from management’s use of accruals to provide a desirable flow of earnings that will result ...How Much New Information Is There in Earnings?The authors measure the relative importance of earnings announcements in providing new information about share prices. ...The Only Game in Town: Stock-Price Consequences of Local BiasResearch has shown that investors within a country have a tendency to hold the stock of local companies. The result is ...Identifying Market Inflection PointsIn this webcast, Russell Napier, ASIP, discusses the following: Analysis of four historical bear markets, and strategic and ...An Overview of the Housing / Credit Crisis: Is There Value Amidst the Rubble?In this webcast, Whitney Tilson discusses the following: Causes and consequences of the "great U.S. housing ...Global Systemic Risk: What We've Learned and the Way Forward In this webcast, Nouriel Roubini discusses the following: Outlook for the U.S. and global economy Should we worry ...Sovereign Wealth Funds: How Energy Is Contributing to a Global Reallocation of Wealth In this podcast, Rachel Ziemba discusses the following: Are sovereign wealth funds here to stay, and will their influence ...Unconventional Resources: Canada's Oil SandsIn this podcast, Rick George discusses the following: Opportunities presented by an unconventional petroleum resource basic ...Alternative Energy Sources In this webcast, Pearce W. Hammond, Jr., CFA, discusses the following: How will alternative energy sources grow in ...The Oil Service Sector: The New Big Oil? In this webcast, Byron K. Pope, CFA, discusses the following: What role can the service sector play in a world where ...When Is Stock Picking Likely to Be Successful? Evidence from Mutual Funds Consistent with a costly arbitrage equilibrium in which arbitrage costs insulate mispricing, this study finds that mutual fund ...Trading Volume and Stock Investments Previous studies suggest that trading-volume measures may proxy for a number of factors, including liquidity, momentum, and ...Applied Behavioral Finance: White Swans, Revulsion, and ValueCurrent market conditions, dire as they are, represent not a black swan but a predictable surprise. Unfortunately, ...Settling DownThe global research settlement has altered the research business, but a key provision is due to expire soon.Information OverloadCan information technology help asset managers improve research?War Stories from the Past Year: A Survivor's Guide In this podcast, Alan J. Brown, FSIP, discuss the following: Determining a market value when there is no market ...GIC Food and Water Panel Discussion In this podcast, from the GIC 2009 "Food and Water—Basic Challenges to International Stability" conference, Jim ...Emerging and Frontier Markets: The Middle East and North Africa Region In this webcast, presented in partnership with the Chartered Alternative Investment Analyst (CAIA) Association, Khaled Abdel ...Asset Growth and the Cross-Section of Stock ReturnsTotal asset growth is examined as a predictor of returns during the 1968–2003 period. Results support a strong negative ...Do Local Analysts Know More? A Cross-Country Study of the Performance of Local Analysts and Foreign AnalystsThe authors of this study consider the theory that local analysts have an advantage over more distant analysts. They ...A Comprehensive Look at the Empirical Performance of Equity Premium PredictionThe authors review the evidence on the ability of linear models to predict the equity premium (i.e., the difference ...Expected Inflation and the Constant-Growth Valuation ModelThe authors investigate the validity of the constant-growth valuation model when factoring in expected inflation. They ...Earnings and Equity Valuation in the Biotech Industry: Theory and EvidenceIn this article, the authors examine the effect of the quality of a company’s investments and uncertainty about that ...Deep-Value Investing, Fundamental Risks, and the Margin of SafetyAll investors have the option not to act on an investment opportunity. The option to wait for a better opportunity has ...Suppressed Negative Information and Future UnderperformanceGood news travels rapidly, but bad news may not travel. The author finds that a decrease in analyst coverage of a ...Shorting Companies That Restate Previously Issued Financial StatementsThe authors study whether stock prices decline when companies announce that their previously issued financial ...Leveraged ETFs: A Risky Double That Doesn’t Multiply by TwoLeveraged exchange-traded funds are a new investment vehicle designed to deliver a multiple—commonly two times—of the ...Accruals, Capital Investments, and Stock ReturnsThe evidence from this study shows that the “accruals anomaly” and the “capital investment anomaly” are distinct, even ...The Accruals Anomaly and Company SizeResearch has shown that a trading strategy based on publicly available accounting accrual information can earn abnormal ...Models This article analyzes the methodology of modeling in the physical sciences and in finance. Whereas hobbyists’ models aim for ...A Moving TargetGiven constant change, valuing investment research remains a challenge.Global Financial Crisis Roundtable In this webcast, Jason Zweig moderates a panel of experts including Theodore R. Aronson, CFA, Abby Joseph Cohen, CFA, Martin S. ...Expected Returns for the Next 20 YearsIn this webcast, James P. O'Shaughnessy discusses the following: Systematic, quantitative approaches as superior ...White Swans, Revulsion, and ValueIn this webcast, James Montier discusses the following: The current crisis can be called a predictable surprise, not a ...The Myth of DiversificationIn this webcast, Sébastien Page, CFA, discusses the following: Does diversification “lend you an umbrella when the sun is ...Dante Meets DCF: The 10 Biggest "Sins" in DCF Valuation (Part 1)In this webcast, Aswath Damodaran discusses the following: Input traps and inconsistencies of discounted cash flow (DCF) ...Dante Meets DCF: The 10 Biggest "Sins" in DCF Valuation (Part 2)In this webcast, Aswath Damodaran discusses the following: Input traps and inconsistencies of discounted cash flow (DCF) ...Bear Market Active InvestingIn this webcast, Peter H. Puccetti, CFA, discusses the following: The impact of the credit crisis on small cap stock ...Conversation with a Money Master 2008In this podcast, hear a conversation with V. Prem Watsa, CFA, a renowned value investor who will discuss his investment approach, ...From Wall Street to the Great Wall: Investment Opportunities in ChinaMost investors, including institutional investors, are underexposed to China, despite the fact that it is the fastest ...The EVA Framework and the Current Economy (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Creating a “Smart” Conditional Consensus Forecast The study examined analyst forecasts of 26 macroeconomic statistics for August 1998 through March 2007. The four research ...Nonlinear Mean Reversion in Stock PricesThis study provides new evidence of mean reversion of stock market returns. It shows that the speed of mean reversion ...Are There Long-Run Implications of Analyst Coverage for IPOs?Investment banks try to persuade their IPO clients that the research services they provide are critical to the ...First Come First DisservedThe authors investigate market reactions to early versus late earnings announcements of companies in similar ...How Does Investor Sentiment Affect the Cross-Section of Stock Returns?The authors present evidence that investor sentiment has a larger effect on the stocks of companies that are difficult ...Which Shorts Are Informed?NYSE SuperDOT short sales order flow data during the 2000–04 period are used to assess whether short sellers are ...Are Analysts All Alike? Identifying Earnings Forecasting AbilityThe authors investigate the earnings forecasting ability of analysts and provide evidence that quality differentials ...Do Core and Non-Core Cash Flows from Operations Persist Differentially in Predicting Future Cash Flows?The authors examine whether disaggregating cash flow data into component cash flows improves cash flow predictability. ...More Than Words: Quantifying Language to Measure Firms’ FundamentalsIn this article, the authors ask whether qualitative information in company-specific news stories can be used to ...China’s Exchange Traded Fund: Is There a Trading Place Bias?Previous research shows mixed results when investigating the existence of trading place bias in equity returns. The ...The Persistence and Pricing of the Cash Component of EarningsThe authors investigate the persistence of three cash components of earnings and find that accruals are less persistent ...Isolating the Information Content of Equity Analysts’ Recommendation Changes, Post Reg FDThe authors examine the value of equity analysts’ recommendation changes subsequent to the passage of Regulation Fair ...Buy-Side vs. Sell-Side Analysts’ Earnings ForecastsThe study reported here is a comparison of the earnings-forecasting performance of analysts at a large buy-side firm ...Quarterly Accruals or Cash Flows in Portfolio Construction?Using quarterly and rolling four-quarter data, this study explores the incremental roles of accruals and net operating ...An Examination of Value Line’s Long-Term ProjectionsPrevious researchers have examined the performance of Value Line’s timeliness indicator (an indicator of short-term ...Accruals, Capital Investments, and Stock Returns The evidence from this study shows that the “accruals anomaly” and the “capital investment anomaly” are distinct, even though ...The Accruals Anomaly and Company Size Research has shown that a trading strategy based on publicly available accounting accrual information can earn abnormal returns ...Long-Term Price Effect of S&P 500 Addition and Earnings Quality When a company is added to the S&P 500 Index, it receives a positive price response. Several explanations for this effect ...Pre-Issue Investor Optimism and Post-Issue Underperformance Prior studies have documented long-run stock market underperformance after security offerings. Some studies conjectured that the ...Employee Stock Option Valuation with an Early Exercise Boundary Many companies are recognizing that the Black–Scholes formula is inappropriate for employee stock options (ESOs) and are moving ...The Anatomy of an LBO: Leverage, Control, and ValueA typical leveraged buyout (LBO) has three components. The acquirers (1) borrow a significant portion of a publicly ...Considering the AlternativesEvaluating alternative research providers is a new challenge for many firms.Frontier MarketsInvestors are going beyond emerging markets and blazing new trails. What are the potential risks and rewards?Green AlphaCan investing based on environmental, social, and governance factors enhance performance? Some investors are ...Do Affiliated Analysts Mean What They Say?The equity market’s reaction to recommendations from affiliated and independent analysts during the 1994–2005 period is ...The Expected Value PremiumThis study uses dividend growth rates to determine whether an expected value premium exists ex ante. The authors find ...Individual Investor Trading and Stock ReturnsThe authors examine the relationship between net individual investor trading and short-horizon returns for all common ...The Long-Lasting Momentum in Weekly ReturnsExtreme one-week stock returns reverse in the short run. Returns during the subsequent 52 weeks, however, are in the ...Challenges in Quantitative Equity ManagementSince the late 1990s, a large percentage of assets under management has flowed into quantitatively managed funds, ...Affect in a Behavioral Asset-Pricing ModelStocks, like houses, cars, watches, and other products, exude “affect”—that is, they are considered good or bad, ...Where Is the Value Premium?The value premium is driven by 7 percent of the stock market. The 93 percent of market capitalization held most by ...Market Bailouts and the ‘Fed Put’Buy-Side vs. Sell-Side Analysts’ Earnings Forecasts The study reported here is a comparison of the earnings-forecasting performance of analysts at a large buy-side firm with the ...Valuing Illiquid Common Stock Illiquid common stock is worth less than stock that can be readily sold because the investor incurs an opportunity cost by being ...How Variation in Signal Quality Affects Performance The information coefficient (IC), the correlation between forecasted and realized return, is a popular measure of signal ...Stock Repurchases and the EPS Enhancement Fallacy A common belief among practitioners and academics is that the increased EPS associated with a stock repurchase creates value for ...Long-Term Impact of Russell 2000 Index RebalancingThe study reported here examined the long-term impact of Russell 2000 Index rebalancing on portfolio evaluation. A buy-and-hold ...You Shouldn't Need ESP to Understand ESGA new manual looks at environmental, social, and governance factors in company reports.Managing Portfolios in a World of Multiple BubblesAsset-class bubbles present a challenge for investors. The U.S. Federal Reserve Board has responded to the bursting of ...Lifting the Veil on 130/30 StrategiesShort-extension strategies can increase a portfolio’s information ratio and thus its efficiency and can be used with a range ...Active Extensions in the Fund-Level ContextEquity beta is overwhelmingly the most important component of a fund’s volatility. But because 130/30 active extension ...Rethinking Tax-Efficient Asset Allocation for the High-Net-Worth Investor In this podcast, Niall J. Gannon discusses the following: Does the notion that “stocks outperform bonds over the long ...Investing in Private EquityIn this podcast, Mark D. Wiseman discusses the following: Prospective correlations of private equity investments with ...Anatomy of the Bear: Lessons from Wall Street’s Four Great Bottoms (a review)The author of this interesting book weaves together historical events with investor sentiment surrounding the great ...The Standard & Poor’s Guide to Selecting Stocks (a review)This easy-to-comprehend and instructive book informs the reader about the numerous websites that provide (generally at ...The Value of LeadershipIs behavioral transparency more telling than financial transparency?Quarterly Accruals or Cash Flows in Portfolio Construction? Using quarterly and rolling four-quarter data, this study explores the incremental roles of accruals and net operating cash ...Asset Fire Sales (and Purchases) in Equity MarketsMutual funds that experience large outflows of funds must quickly reduce their asset holdings, which generates sales at ...Asset Pricing in China’s Domestic Stock Markets: Is There a Logic?Chinese stock markets have been characterized as being relatively irrational in their security pricing. The authors ...Asymmetries in Stock Returns: Statistical Tests and Economic EvaluationThe authors provide a model-free test for unequal correlations in which stocks move more often with the market during ...Do Mutual Funds Time the Market? Evidence from Portfolio HoldingsAlthough existing literature has documented that stock market returns in the aggregate are predictable, other studies ...Liquidity and Expected Returns: Lessons from Emerging MarketsA common, widely held view is that liquidity is priced. In other words, securities with returns that are positively ...Patterns in Analysts’ Long-Term Earnings ForecastsMuch literature in the field of investments is devoted to studying the significance of the earnings estimates of ...Importance of Style Diversification for Equity Country SelectionThe authors find that style diversification—combining fundamental and momentum variables—delivers significantly higher ...Improved Forecasting of Mutual Fund Alphas and BetasApplying an ordinary least-squares (OLS) model to identify a mutual fund manager with special talents incurs ...Opportunities and Risks in Exchange-Traded Funds (ETFs)In this webcast, Mark Armbruster, CFA, discusses the following: Characteristcs of ETFs and their popularity among ...Challenges in Quantitative Equity Management (corrected July 2008) Quantitative equity management has mushroomed recently and now represents a respectable fraction of equity asset management. But ...Does Algorithmic Trading Improve Liquidity?The authors analyze whether algorithmic trading has increased the efficiency and liquidity of the NYSE and find that the increase ...Where Is the Value Premium? The value premium is driven by 7 percent of the stock market. The 93 percent of market capitalization held most by institutional ...Equity Returns at the Turn of the Month The turn-of-the-month effect in U.S. equities is found to be so powerful in the 1926–2005 period that, on average, investors ...Affect in a Behavioral Asset-Pricing Model Stocks, like houses, cars, watches, and other products, exude “affect”—that is, they are considered good or bad, beautiful or ...When Minnow Swallows WhaleWill small companies with big appetites give investors indigestion?What Happened to the Quants in August 2007? In this webcast, Andrew W. Lo discusses the following: Events that led to the unprecedented losses experienced by ...Comparing the Stock Recommendation Performance of Investment Banks and Independent Research FirmsThe authors investigate the stock recommendations of investment banks and independent research firms over the 1996–2003 ...Conflicts of Interest in Sell-Side Research and the Moderating Role of Institutional InvestorsSell-side analysts may be pressured by their firm’s investment banking and brokerage divisions to provide more ...The Dynamics of Earnings Forecast ManagementThe authors analyze how companies manage earnings—particularly, “talking down” earnings forecasts immediately prior to ...Enhanced Active Equity Portfolios Are Trim Equitized Long-Short PortfoliosThe authors compare an equitized market-neutral portfolio with an enhanced active portfolio and find that the market ...Momentum and Credit RatingThe capital asset pricing model anomaly—momentum profits from buying past winners and selling past losers—is not ...Optimal GearingPrevious research has identified the impact that constraints and various costs can have on the implementation ...The Risk Return Tradeoff in the Long Run: 1836–2003Although the risk–return trade-off is fundamental to finance, the empirical literature has offered mixed results. The ...Supply and Demand Shifts in the Shorting MarketThe authors use a unique identification strategy to isolate the effect of shorting market activities on stock prices. ...The Adjusted Earnings YieldThe earnings yield, determined by the ratio of reported earnings to price, is frequently used to predict real return. ...Turn the Beat AroundExperts share tips on finding good turnaround opportunities.Conversation with a Money Master: Free Cash Flow and Quality of EarningsIn this webcast, Robert A. Olstein and Fred H. Speece, Jr., CFA, discuss the following: Valuation and inferential ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIIIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Passion for Reality: Paul Cabot and the Boston Mutual Fund (a review)This biography is an intelligent and well-written account of the career of an important figure in the formation of the ...Valuing Commercial Real Estate Portfolios: Public vs. Private Market PerspectivesHigh levels of liquidity and a shift in investing from growth to income have led to high values in commercial real ...Behavioural InvestingMr. Montier applies a broad range of behavioral finance principles to the institutional investor through a series of stand-alone ...The Book-to-Price Effect in Stock Returns: Accounting for LeverageThe book-to-price ratio (B/P) by itself is positively related to subsequent stock returns, and two subcomponents of B/P, ...Disagreement and the Stock MarketThe authors illustrate the importance of the joint behavior between stock prices and trading volume by using disagreement models. ...Efficiency and the Bear: Short Sales and Markets around the WorldA common belief among regulators is that short-sale restrictions reduce the relative severity of panics. The increased popularity ...Firm-Specific Attributes and the Cross-Section of MomentumThe authors attempt to identify whether it is possible to use company-specific microeconomic factors, such as revenues, costs, ...Giving Content to Investor Sentiment: The Role of Media in the Stock MarketThis study examines the influence of media on the stock market. Using the Wall Street Journal’s “Abreast of the Market” column, ...Investor Sentiment in the Stock MarketThe authors look at the role of sentiment in the stock market. They quantify sentiment and determine which stocks are most likely ...MRI and SRI Mutual Funds: A Comparison of Christian, Islamic (Morally Responsible Investing), and Socially Responsible Investing (SRI) Mutual FundsThe authors examine the overlap among the investment goals and constituents of Christian funds, Islamic funds, and socially ...Stock Return Predictability: Is It There?Previous research has found that dividend yields forecast stock returns at long time horizons. Using more appropriate statistical ...Value and Growth, Theory and PracticeThe author examines growth stocks versus value stocks and dispels the common misconception that value beats growth. Using a value ...What Are Stock Investors’ Actual Historical Returns? Evidence from Dollar-Weighted ReturnsFor the NYSE and Amex, the author finds that dollar-weighted returns are 1.9 percent per year lower on average than ...Measuring Free Cash Flows for Equity Valuation: Pitfalls and Possible SolutionsThe authors describe problems with common cash flow metrics and provide advice on how to calculate cash flow metrics that ...110 Common Errors in Company ValuationsThe authors describe 110 common errors seen in company valuations performed by financial analysts, investment banks, and ...The Adjusted Earnings YieldThe earnings yield, determined by the ratio of reported earnings to price, is frequently used to predict real return. ...Trading Patterns and Excess Comovement of Stock ReturnsIn April 2000, 30 stocks were replaced in the Nikkei 225 Index. The unusually broad index redefinition allowed for a study of the ...In the RoughIndependent research is in a difficult spot, but some players still have a shot at success.Impact ZoneSurf’s up for shareholder activists in Asia. But are they heading for a wipeout?Prognostications and PostulationsDoes cash flow provide better visibility than earnings?A Good QuestionAre client commission arrangements (CCAs) good for investors?Do Industries Lead Stock Markets?In this article, the authors investigate whether the performance of certain industries can predict, with a lead, broader market ...On the Importance of Measuring Payout Yield: Implications for Empirical Asset PricingPrevious research has investigated the implications of using dividend yield for asset pricing. However, these studies sometimes ...Stock Returns, Dividend Yield, and Book-to-Market RatioThe popular Campbell–Shiller dividend yield model suffers from instability of corporate dividend policy, and the Vuolteenaho ...Who Is Afraid of Reg FD? The Behavior and Performance of Sell-Side Analysts Following the SEC’s Fair Disclosure RulesThe U.S. SEC’s Regulation FD (Fair Disclosure) was adopted to “level the playing field” in the dissemination of corporate ...Measuring Investor Sentiment in Equity MarketsResearch into the relationship between investor sentiment and asset prices suggests that sentiment may sometimes describe ...Firm, Strategic Group, and Industry Influences on PerformanceA stream of published research by strategy scholars has found that variation in performance is greater within industries than it ...Long-Run Returns Following Open Market Share RepurchasesDouble Surprise into Higher Future ReturnsPost-earnings-announcement drift is the well-documented ability of earnings surprises to predict future stock returns. Despite ...Muddy WatersCan enterprise risk management help analysts and companies plumb the depths of risk?Special EffectsShould equity analysts adjust their models for foreign currency exposure?Green Investing: Why It Is Different This TimeSince 2004, venture capital firms have doubled their investments in the field of green investing. At times in the past, ...Being ThereAre analysts who make company site visits delusional?Blowing Bubbles in the Punch BowlInvestors can learn a lot by studying the history of overvalued companies. Like how to spot the warning signs in the future.Follow the MoneyDoes cash flow provide better visibility than earnings?Front Running on the Front BurnerSEC examination into front running addresses concerns of CFA Institute Centre for Financial Market Integrity.Interaction of Stock Return Momentum with Earnings MeasuresExamination of the interaction of stock return momentum with various earnings measures finds that large-capitalization companies ...Can Mutual Fund “Stars” Really Pick Stocks? New Evidence from a Bootstrap AnalysisThe authors study the performance of U.S. open-end domestic equity mutual funds over the period from 1975 to 2002. The authors ...Downside RiskThe prices of some assets decline more in falling markets than they advance in rising markets. Rational investors would likely ...The Equity Premium: Consistent with GDP Growth and Portfolio InsuranceTwo macroeconomic equity premium models are derived and tested for consistency with historical data. The first model illustrates ...Minimum-Variance Portfolios in the U.S. Equity MarketNew econometric techniques coupled with increased computing power allow practitioners to construct minimum-variance portfolios ...Profitability, Investment and Average ReturnsIn this article, the authors develop empirical models to explain the effects of companies’ profitability and investment on stock ...The Extreme Future Stock Returns Following I/B/E/S Earnings SurprisesAn alternative definition of earnings surprise leads to larger and longer-lasting excess returns relative to the methodology ...Stock Price Reaction to Public and Private InformationThe author uses a series of theoretical models to empirically test the effect of information on stock price movement after ...Strength of Analyst Coverage Following IPOsThe authors investigate whether companies with poor aftermarket performance are given favorable recommendations by analysts who ...Investor Overconfidence and Trading VolumeThe authors find that trading volume is positively related to past returns, both for marketwide and individual security turnover. ...Liquidity and Autocorrelations in Individual Stock ReturnsThe authors document short-run price reversals in markets for individual stocks associated with noninformational trading. These ...The Value Premium and the CAPMPrevious research has shown that value stocks have higher returns than growth stocks—a difference referred to as the value ...Presidential Election Uncertainty and Common Stock Returns in the United StatesThe Relationship between the Value Effect and Industry AffiliationStock Return Momentum and Investor Fund ChoicesAre Cover Stories Effective Contrarian Indicators?Headlines from featured stories in Business Week, Fortune, and Forbes were collected for a 20-year period to determine whether ...Causes and Seasonality of Momentum ProfitsWith Januaries (a month in which lagged “losers” typically outperform lagged “winners”) excluded, the average monthly return to a ...Is Cash Flow King in Valuations?Contrary to the common perception that operating cash flows are better than accounting earnings at explaining equity valuations, ...Residual Income Approach to Equity Country SelectionThe predictive power for country selection of expected returns estimated through the residual income model is examined through ...Interest Rate Swaps: Accounting vs. EconomicsWith interest rate swaps being the most widely used of all financial derivative contracts, financial analysts and engineers ...FASB’s Quick Fix for Pension Accounting Is Only First StepHidden liabilities, understated expenses, and discretionary management assumptions make pension accounting controversial. ...Fed UpCan following the Fed help equity analysts pick winners?Sell-Side and Buy-Side Research: Evidence and Future ModelsSell-side research is being squeezed for funding while funding for buy-side research continues to grow. But ...The Equity Risk Premium: Essays and Explorations (A review)Two leading researchers in the field have collected their essays on the equity risk premium and present them with ...Outperform with Expectations-Based Management: A State-of-the-Art Approach to Creating and Enhancing Shareholder Value (a review)This practical handbook for managers (which is also highly useful for investment analysts) provides arguments and a ...Company Valuation Methods: The Most Common Errors in ValuationsThe author evaluates the most widely used company valuation methods, including balance sheet-based methods, income ...The Information in Option Volume for Future Stock PricesThis article sheds light on the information content of options volume (put–call ratio) for the underlying stock returns. Results ...Candlestick Technical Trading Strategies: Can They Create Value for Investors?The authors investigate the profitability of candlestick technical analysis, which generates signals based on the relationship ...Do IPOs Really Underperform in the Long-Run? New Evidence from the Canadian MarketUnlike their American counterparts, Canadian initial public offerings (IPOs) do not underperform in the long run. These results ...The History and Performance of Concept StocksThe authors study the long-term performance of “concept stocks,” which they define as those stocks in the 91st–100th percentiles ...Industry Concentration and Average Stock ReturnsThis paper integrates literature in industrial organization with financial economics, and its main premise is quite intuitive. ...Investor Sentiment and the Cross-Section of Stock ReturnsClassical finance theory suggests that in efficient markets, rational investors hold diversified portfolios and security prices ...Addition to the Nikkei 225 Index and Japanese Market Response: Temporary Demand Effect of Index ArbitrageursThe authors investigate the temporary impact on a stock’s price following the announcement that the stock will be added to the ...Market Reaction to Changes in the S&P SmallCap 600 IndexThe authors examine the effects on stock price, trading volume, and institutional ownership subsequent to changes in the ...S&P 500 Index Changes and Investor AwarenessThe authors document that, on average, companies added to the S&P 500 Index experience a permanent price increase, whereas ...Accounting Restatements: Are They Always Bad News for Investors?The authors examine the relationship between accounting restatements and their impact on equity returns. The literature has ...Do Investors Capture the Value Premium?The authors investigate style investing and fail to find evidence of a value premium in equity indices, mutual funds, or large ...Value Destruction and Financial Reporting DecisionsThe comprehensive survey reported here allowed analysis of how senior U.S. financial executives make decisions related to ...Do a Firm’s Equity Returns Reflect the Risk of Its Pension Plan?Public vs. Private EquityPerpetual MotionA new study looks at trends in quantitative equity portfolio modeling. This article includes a sidebar written by Intertek Group ...Beyond CategoryThis article addresses the following key points: • In backtests, fundamental indexes report higher returns with lower volatility ...From Overload to OverdriveThis article addresses the following key points: • 1.2 million to 2 million investment research reports, notes, and e-mails are ...P/Es and Pension Funding RatiosSome evidence supports the intriguing conjecture that P/Es in the U.S. market may decline in times of both significantly lower, ...The Equity Risk Premium: An Annotated Bibliography The equity risk premium is broadly defined as the difference between the expected total return on an equity index and the return ...Conversation with a Money MasterBill Miller, CFA, is chairman and chief investment officer at Legg Mason Capital Management, Inc., and was named “The Greatest ...On Low-P/E InvestingJohn B. Neff, CFA, was a portfolio manager at the Vanguard Group for 31 years, during which time he successfully managed the ...Value Destruction and Financial Reporting DecisionsThe comprehensive survey reported here allowed analysis of how senior U.S. financial executives make decisions related to ...The Misuse of Expected ReturnsMuch textbook emphasis is placed on the mathematical notion of expected return and its historical estimate via an arithmetic ...Competing for Capital: Investor Relations in a Dynamic World (a review)Within a broad overview of the functions and responsibilities of the investor relations professional, this book focuses on the ...Can Growth Opportunities Explain the Diversification Discount?The authors test the proposition that common stock of diversified companies sells at a discount because diversified companies ...Do Accurate Earnings Forecasts Facilitate Superior Investment Recommendations?The authors investigate whether analysts who have better accuracy of earnings forecasts have better buy/sell investment ...Expected Earnings Growth and Portfolio PerformanceThe authors use stochastic dominance tests to find whether the superior performance of value portfolios arises from unknown risk ...The Impacts of Index Rebalancing and Their Implications: Some New Evidence from JapanThe author examines Nikkei 225 rebalancings from 1970 to 2002 and finds statistical evidence of permanent price and volume ...The January Barometer: Further EvidenceThe authors reexamine whether stock returns in January predict returns over the subsequent 11 or 12 months. The study separates ...On Russell Index ReconstitutionThe author examines the index effect with respect to a number of Russell indices and investigates which of the competing theories ...Premiums-Discounts and Exchange Traded FundsExchange traded funds (ETFs), unlike their mutual fund cousins, generally trade at fair value relative to their underlying stock ...Would There Ever Be Consensus Value and Source of the Equity Risk Premium? A Review of the Extant LiteratureOngoing debate exists about the size and source of the equity risk premium, one of the most important concepts in finance. The ...Asset Float and Speculative BubblesThe authors model the relationship between asset float (tradable shares) and speculative bubbles. They find that bubble behavior ...Dividend Payout and Future Earnings Growth Because dividends reduce the funds available for investment, many market observers and investors associate high dividend payout ...A Great Company Can Be a Great InvestmentA classic investment mistake is to confuse a great company with a great investment. It is a mistake because a company’s ...Index Changes and Losses to Investors: S&P 500 and Russell 2000 Index FundsWatch a free webcast presentation by Vijay Singal, CFA, on his July/August 2006 FAJ article “Index Changes and Losses to ...The January EffectAnalysis of broad samples of value-weighted and equal-weighted returns of U.S. equities documents that abnormally high rates of ...Earnings Quality Analysis and Equity ValuationFor years, a widely held belief was that markets are efficient and that fundamental analysis is futile. But ...Expectations Investing: Reading Stock Prices for Better ReturnsInvesting relies on expectations, and revisions in expectations trigger changes in stock prices. Accurately ...Finding Alpha via Covered Index WritingCovered S&P 500 Index call strategies have, on average, outperformed the S&P 500 Index over the past 15+ years while ...Why Company-Specific Risk Changes over TimeCompany-specific risk climbed steadily between 1962 and 1999 in the U.S. market but fell sharply between 2000 and 2003. This ...An IFRS 2 and FASB 123 (R) Compatible Model for the Valuation of Employee Stock OptionsAlthough accounting standards boards have recently issued standards requiring companies to recognize employee stock options as an ...The Impact of Performance-Based Compensation on MisreportingThe authors examine companies that misreported their financials and were forced to restate earnings. They find a high positive ...The Capacity of an Equity StrategyAs the assets under management of an equity strategy increase, the ability to increase alpha is constrained. This constraint has ...The Impact of Inflation Measures on the Real Returns and Risk of U.S. StocksThe authors empirically examine the most prominent measures of inflation and present a new measure for which no comparable ...Labor Income and Predictable Stock ReturnsInvestors have two sources of income to fund consumption: labor income and income from their investments. The mix between the two ...On the Out-of-Sample Predictability of Stock Market ReturnsThe author analyzes out-of-sample predictability of stock market returns. The consumption–wealth ratio and market variance are ...Pension Plan Funding and Stock Market EfficiencyAccounting regulations require that if a loss of more than 10 percent occurs in a pension plan, the company has to amortize the ...R2 Around the World: New Theory and New TestsRecent research finds that R2 (coefficient of determination) values in regressions of individual stock returns in an expanded ...The Current State of Asia-Pacific Stock Exchanges: A Critical Review of Market DesignThe authors summarize the differences in design and operation among 10 east Asian stock exchanges. They base their summary on ...When Does R&D Expense Distort Profitability Estimates?The authors develop a model that determines when return on assets (ROA) is more likely to be distorted by the immediate expensing ...Are Common Stocks a Hedge against Inflation?Tax-paying equity investors in the United Kingdom are insulated from losses in real wealth caused by inflation over long periods ...Trends in Quantitative FinanceThis introduction to recent developments in modeling equity returns provides a plain-English, formula-free review of quantitative ...The Cross-Section of Volatility and Expected ReturnsDividends, Stock Repurchases, and ValuationDo the Fama–French Factors Proxy for Innovations in Predictive Variables?Empirical Evidence on Capital Investment, Growth Options, and Security ReturnsHow Do Analyst Recommendations Respond to Major News?Terms of EngagementCFA Centre joins efforts to reverse overemphasis on short-term performance.Cash Flows, Accruals, and Future ReturnsThis study explored the “accrual anomaly.” The study is unique because it analyzed originally reported—unrestated—quarterly data ...Do We Accept Accrual Profits at Our Peril?The study described documented evidence that informed traders use their proprietary information on accrual quality to trade ...A Great Company Can Be a Great InvestmentA classic investment mistake is to confuse a great company with a great investment. It is a mistake because a company’s ...Corporate Governance Practices: Impact on ValuationWhether a link exists between corporate governance (good or bad) and valuation is not clear. But what is ...The Relevance of Socially Responsible Investing to Research Analysts and Financial MarketsIn this webcast, Julie Hudson, CFA, discusses: Similarities and differences in implementing socially responsible investing ...Under PressureThis article addresses the following key points: • Anecdotes abound of analysts pressured to modify opinions to appease clients ...Accentuate the NegativeThis article addresses the following key points: The explosion of hedge funds and the advent of long–short ...Patent NonsenseRestoring sanity to the valuation of intellectual property. TiltIs it time to tilt the portfolio toward growth and away from value or vice versa? Social GracesShould social factors be included in valuation models? Some firms are betting on it. Cite UnseenWhen Anne Casscells saw people on Wall Street comparing apples to oranges, she co-authored a paper that was never published but ...Effect of Institutional and Firm-Specific Characteristics on Post-Privatization Performance: Evidence from Developed CountriesThe authors investigate whether newly privatized companies in developed economies experience improvements in financial and ...Liberalization, Corporate Governance and the Performance of Privatized Firms in Developing CountriesFactors that influence the performance of 230 newly privatized firms (NPFs) from 32 developing countries over the 1980–99 period ...Governance Mechanisms and Equity PricesResearchers are increasingly focused on the importance of corporate governance mechanisms for financial performance and the stock ...The Ability of Earnings to Predict Future Operating Cash Flows Has Been Increasing—Not DecreasingPrevious research found that the explanatory power of earnings for concurrent stock prices has decreased over time. However, the ...Dilution Is a Drag…The Impact of Financings in Emerging MarketsBecause emerging markets can usually offer higher diversification benefits and returns, they have been a popular subject for ...Operating Performance Following Dividend Decreases and OmissionsThe author examines the operating performance of companies with dividend decreases or omissions using quarterly data from 1980 to ...Tax Rates and Stock Returns: An Empirical Analysis of the Information Content of Corporate Tax RatesThe authors explore the information content of corporate tax rates by analyzing the effective tax rates of S&P 500 Index ...The Two Faces of Analyst CoverageThe level of analyst coverage received by a company can be related to the expected amount of investment banking transactions. A ...Is the Book-to-Market Ratio a Measure of Risk?The authors investigate whether the ratio of book value to market value serves as a suitable risk measure when using a ...Returns and Investor Behavior in Taiwan: Does Overconfidence Explain This Relationship?The paper seeks to determine whether Taiwanese investors exhibit behavioral investing patterns consistent with overconfidence. It ...Economic Growth and Equity ReturnsThe author reports a negative relationship between per capita income growth and real equity returns and then presents arguments ...Long-Term Returns on the Original S&P 500 CompaniesThe S&P 500 Index is continually updated, with approximately 20 companies added each year and an equal number dropped. In the ...Short Interest, Institutional Ownership, and Stock ReturnsEffect of Reg FD on Information in Analysts’ Rating ChangesA rich literature examines the effects of analysts’ recommendations on stock prices, and literature is developing on the effect ...Dividend Payout and Future Earnings Growth Because dividends reduce the funds available for investment, many market observers and investors associate high dividend payout ...Deals from Hell: M&A Lessons That Rise Above the Ashes (a review)This readable volume analyzes old and new merger and acquisition failures (and successes) to extract six common factors that ...The Legacy of Fischer Black (a review)This wide-ranging, well-edited book provides a good taste of Black’s approach to quantitative finance through a thoughtful ...Trends in Quantitative Finance This introduction to recent developments in modeling equity returns provides a plain-English, formula-free review of ...Post-Earnings-Announcement Drift: The Role of Revenue SurprisesThe study reported here consisted of estimating earnings and sales (or revenue) surprises either with historical time-series data ...Why the Bubble Burst: U.S. Stock Market Performance since 1982 (a review)With the thoroughness of an able scholar, the author offers evidence that the flow-of-funds methodology provides a unique and ...Using Investor Relations to Maximize Equity Valuation (a review)This short, easy-to-read volume describes aspects of the investor relations function; comments about methods to attract different ...The Behavioral ConnectionThis article addresses the following key points: • According to some experts, a "very real" connection exists between ...Valuation Models and Global MarketsThe value of a company can be estimated several ways, including direct valuation and relative valuation. ...Understanding Drug PricingPharmaceutical companies are prone to making three big pricing mistakes: having an internal or inward focus, ...Big Pharma at the CrossroadsThe global pharmaceuticals industry is operating under challenging conditions that are likely to continue for ...Countries versus Industries in Europe: A Normative Portfolio ApproachThe unification of Europe has resulted in growing influence of industry selection over country selection in optimal portfolio ...Does Idiosyncratic Risk Really Matter?Previous research has demonstrated a positive relationship between stock volatility and future stock returns. In this paper, the ...Dynamic Linkages between the Greater China Economic Area Stock Markets—Mainland China, Hong Kong, and TaiwanThe trend towards integration of global stock markets reduces the benefits of portfolio diversification. However, stock market ...The P/B-ROE Valuation Model RevisitedThe price-to-book ratio–return on equity (P/B–ROE) approach to stock valuation is a two-stage model that was developed in 1984 by ...Returns from Active Management in International Equity Markets: Evidence from a Panel of UK Pension FundsPerformance of international equity pension funds from the United Kingdom over the 1991–97 period is decomposed into security ...Long-Term Returns on the Original S&P 500 CompaniesThe S&P 500 Index is continually updated, with approximately 20 companies added each year and an equal number dropped. In the ...Fault the Tax Code for Low Dividend PayoutsReducing the marginal tax rate on dividend income was not the optimal modification of the tax code. The U.S. corporate tax code ...International Evidence on the Payout Ratio, Earnings, Dividends, and Returns Recent evidence for the U.S. market has shown that, contrary to popular wisdom, the greater the proportion of earnings paid out ...Corporate Failure and Equity ValuationAn important problem for portfolio managers is how to adjust the valuation of equity for the risk that the company may fail. ...Chronic Bias in Earnings ForecastsWhatever the source or explanation of bias in forecasts of company earnings, if such bias persists, it is potentially ...Earnings Quality Analysis and Equity ValuationIn this webcast presentation, Richard G. Sloan discusses: Evidence on the success of earnings quality analysis in ...Expectations Investing — Reading Stock Prices for Better Returns In this webcast presentation, Michael J. Mauboussin discusses: Finding a stock selection process that combines the ...The Active Management Premium in Small-Cap U.S. EquitiesFor the past 20 years, average small-cap U.S. equity managers have outperformed the Russell 2000 Index by over 500 bps per year. ...Extracting Inflation from Stock Returns to Test Purchasing Power ParityThe failure of empirical studies to support the relative purchasing power parity (PPP) may be caused by the use of the CPI to ...Investor Sentiment and Asset ValuationUsing survey data on investor sentiment, the authors provide evidence that sentiment affects asset valuation. Periods of high ...The Stock Market's Reaction to Unemployment News:Stock prices respond positively to news of rising unemployment during expansions but negatively during contractions. The authors ...What Explains the Stock Market's Reaction to Federal Reserve Policy?The authors examine the stock market's reaction to U.S. Federal Reserve Board rate change announcements and find evidence that ...What Stocks Appeal to Institutional Investors?The authors investigate institutional ownership of stocks among the following factors: value versus glamour; momentum; prudent ...Evidence on the Speed of Convergence to Market EfficiencyAlthough day-to-day returns indicate the lack of significant serial correlation, order imbalances can persist for several days. ...There Is a Risk–Return Trade-Off After AllThe authors examine the intertemporal risk–return trade-off by using a new procedure to estimate variance. Their mixed data ...Long-Term Global Market CorrelationsThe authors analyze the correlation structure of the global equity market over the last 150 years. They discover that the global ...An Alternative Approach to International Growth InvestingIn Search of Information Content:Tangible BenefitsThis article addresses the following key points: The presence of institutional investors appears to be important in offsetting ...The Investment Value of an Idea The value of an idea derives from its ability to solve our problems. It ends when a fully developed better idea arrives. No one ...Dividends and the Frozen Orange Juice Syndrome The bonanza of a 15 percent top-bracket federal income tax on dividends has had little impact on values in the stock market or ...Aristotle on Investment Decision Making In this age of inexpensive and abundant data, investors must remain mindful of the limitations of the data they are using for ...Value and Risk: Beyond Betas Risk can be both a threat to a company's financial health and an opportunity to get ahead of the competition. Most analysts, ...Bad Beta, Good BetaResearch on the performance of the capital asset pricing model (CAPM) has shown a failure to adequately describe the relationship ...Capital Investments and Stock ReturnsThe authors examine the relationship between the relative level of corporate capital investment and subsequent stock returns. ...Corporate Earnings and the Equity PremiumThe authors provide further analysis of the equity premium puzzle by presenting a continuous-time model in which dividends are a ...Information Content of Equity Analyst ReportsThe authors examine the impact of information from analyst reports on market abnormal returns from 1997 to 1999. They find that ...Sources of Return in Global InvestingThe authors present a new framework for analyzing international equity returns that considers unique industry and style factors. ...Stock Prices and Fundamentals:According to the Gordon growth model, the dramatic increase in equity prices relative to earnings and dividends in the late 1990s ...Valuing Routine Intangible AssetsThe author considers valuation techniques for “routine” intangible assets, or those that do not increase firm value but, rather, ...Reflections on the Efficient Market Hypothesis:The author compares the performance of actively managed mutual funds over 30-plus years with benchmarks and index funds. For ...Why Non-U.S. Investing is Essential, Not OptionalThe author examines international equity investing by focusing on performance, valuation, risk, and globalization. He concludes ...Value and Risk:Risk can be both a threat to a company's financial health and an opportunity to get ahead of the competition. Most analysts, when ...Abnormal Returns from the Common Stock Investments of the U.S. SenateGSE RisksStock Return and Interest Rate Risk at Fannie Mae and Freddie MacHedge Funds in Corporate ClothingThis article addresses the following key points: At the end of June 2004, the total amount for US-based derivatives for the top ...Aristotle on Investment Decision MakingIn this age of inexpensive and abundant data, investors must remain mindful of the limitations of the data they are using for ...Aristotle on Investment Decision MakingIn this age of inexpensive and abundant data, investors must remain mindful of the limitations of the ...Choosing the Right Valuation ApproachBefore beginning any analysis, the analyst should define the claim and level of value, the valuation date, ...An Analyst's Perspective on Financial ReportingAnalyzing financial statements is difficult because (1) the information is spread across three separate ...The Short Perspective in Today's MarketsWhen analyzing a company, examining the financials—the numbers—is clearly important. But it is not the only ...Combining Technical and Fundamental AnalysisThe efficient market hypothesis is flawed because investors do not have perfect information and they do not ...The Rise of Independent ResearchThis article addresses the following key points: Independent research revenue is expected to triple by 2008. With more research ...Good Corporate Governance Works:Inclusion in the California Public Employees' Retirement System's Focus List is positively related to company performance. This ...Do Security Analysts Exhibit Persistent Differences in Stock Picking Ability?The authors determine whether analysts who have demonstrated a superior or inferior ability in picking stocks continue to exhibit ...How Informed Are Actively Trading Institutional Investors?The authors present evidence that institutional investors who are the most frequent traders have information that allows them to ...Institutional Herding in the ADR MarketThe authors investigate the effect of herding by institutions in the market for American Depositary Receipts (ADRs). They find ...Low-Cap and Low-Rated CompaniesSmall-cap stocks have underperformed large-cap stocks since the 1980s in most developed stock markets around the world, reversing ...Predicting Returns with Financial RatiosThe author uses data from 1946 to 2000 to compare the ability of three regression models to predict aggregate stock market ...Stock Returns and the Business CycleThe author examines whether U.S. monthly index returns and economic factors have, in fact, varied as predicted. In doing so, he ...Traditional Beta, Downside Risk Beta, and Market Risk PremiumsThe author develops an asset-pricing model similar to the capital asset pricing model using conditional value at risk (CVAR) as ...Hedge Funds and the Technology BubbleThe efficient market hypothesis suggests that rational investors trade against irrational price increases to prevent price ...Rational ExuberanceThe author maintains that bubbles are a viable candidate for explaining the extreme volatility of asset prices. His review covers ...Does Stock Return Momentum Explain the “Smart Money” Effect?Stock Prices, Firm Size, and Changes in the Federal Funds Rate TargetWhy Has IPO Underpricing Changed over Time?The Investment Value of an IdeaThe value of an idea derives from its ability to solve our problems. It ends when a fully developed better idea arrives. No one ...The Economics of Short-Term Performance ObsessionIn theory, discounted cash flows (DCFs) set prices in well-functioning capital markets. In practice, investment managers attach ...Dividends and the Frozen Orange Juice SyndromeThe bonanza of a 15 percent top-bracket federal income tax on dividends has had little impact on values in the stock market or on ...Value and Risk: Beyond BetasRisk can be both a threat to a company’s financial health and an opportunity to get ahead of the competition. Most analysts, when ...Understanding MomentumThe extensive literature on price momentum effects is a potential source of confusion for portfolio managers because conflicting ...Fundamental IndexationA trillion-dollar industry is based on investing in or benchmarking to capitalization-weighted indexes, even though the finance ...Long–Short Strategies May Not Be Factor-NeutralLong–short strategies designed to reduce risk must be neutral to all factors in a multifactor model, not just ...Economic Sources of Gain in Stock RepurchasesThe authors use more than 5,000 open-market repurchases from 1980 to 1996 to evaluate three economic motives ...Firm Size and the Gains from AcquisitionsThe authors compare market reactions to acquisitions by large companies with reactions to those by small ...Disclosure Quality and the Excess Value of DiversificationThe authors find that increased disclosure reduces the diversification discount long recognized in ...Active versus Passive Strategies for EAFE and the S&P 500The authors determine whether active strategies can outperform passive strategies that use the S&P 500 ...Don't Worry about the Election The authors compare the effect of the U.S. president's political party, political gridlock (i.e., separate parties controlling ...Estimating the Market Risk PremiumThe historical average of excess market returns is quite likely to overstate the market risk premium after ...Evidence to Support the Four-Factor Pricing Model from the Canadian Stock MarketThe authors add a momentum component to the Fama–French three-factor pricing model. They test their ...Mean Reversion in Earnings and the Use of E/P Multiples in Corporate ValuationThe impact on a company's earnings-to-price ratio (E/P) resulting from a significant change in earnings can ...New Lists: Fundamentals and Survival RatesNew stock listings by companies publicly raising equity for the first time increased dramatically in the ...Limited Stock Market Participation and Asset Prices in a Dynamic EconomyTo explain the equity premium puzzle, the author presents a consumption-based asset-pricing model with three ...Asset Allocation in Stable and Unstable TimesPortfolio optimization is sensitive to episodes of financial distress, which cause temporary increases in two ...Inflation Illusion and Stock PricesThe authors examine the Fed model's ability to determine stock yields and conclude that the model is ...Style Management in Equity Country AllocationStrategies that entailed country selection based on relative strength (momentum) posted significant market ...All Things Considered, Taxes Drive the January EffectThe Performance of Socially Responsible Investments: Investment Funds and IndicesFinancial Dynamics: A System for Valuing Technology Companies (a review)A close reading of this book should enable the diligent analyst to view the valuing of technology companies from a fresh ...Using the WACC to Value Real OptionsUse of the weighted-average cost of capital (WACC) in real-option valuation is an alternative to using risk-neutral real-option ...Style Management in Equity Country AllocationStrategies that entailed country selection based on relative strength (momentum) posted significant market risk–adjusted returns ...What Determines Chinese Stock Returns?This study applied the three-factor model to A-shares in the Chinese equity market, one of the fastest growing markets ever. The ...Security Analyst Independence Many investors perceive, based primarily on anecdotal evidence, that analysts do not act independently. What the authors of this ...Employee Stock Options and Equity Valuation Increasingly, companies are turning to employee stock options to meet the challenge of aligning the interests of employees and ...Earnings Quality Understanding the quality of earnings is an essential part of processing and interpreting information. A high-quality earnings ...Valuing Companies by Cash Flow Discounting: Ten Methods and Nine TheoriesThe author analyzes 10 different valuation methodologies and finds that they yield similar results. The author also examines nine ...Option-Implied Risk-Neutral Distributions and Risk Aversion Analysts are accustomed to using prices for the information they contain. A stock price, for example, can be thought of as an ...How to Value a Seasonal Company Discounting Cash FlowsThe author posits that the correct way to value seasonal companies is by discounting cash flows on a monthly, rather than annual, ...Strategy Benchmarks - From the Investment Manager’s PerspectiveDavid Kuenzi explains the inadequacy of using readily available, published indices that do not accurately reflect the investment ...Three Residual Income Valuation Methods and Discounted Cash Flow ValuationThe author demonstrates that three residual income measures, including Economic Profit, Economic Value Added and Cash Value ...Valuation of Brands and Intellectual CapitalThe author considers several methodologies used for valuing brands and intellectual capital, including those of Interbrand, ...Are Calculated Betas Worth for Anything?The author calculated the betas of 3,813 companies using 60 monthly returns each day over a two-month period and found the ...Financial Astrology: Mapping the Presidential Election Cycle in U.S. Stock Markets The authors examined nearly four decades of stock returns and found that U.S. stock prices closely followed the four-year ...Price-to-Earnings Ratios: Growth and Discount RatesWe decomposed the market-level P/E into a no-growth component, which depends only on future discount rates, and a growth ...Equity Premiums around the WorldThe authors update the long-term realized equity risk premium for 19 different countries for 1900–2010. For the 19-country World ...Rethinking the Equity Risk Premium: An Overview and Some New Ideas In 2001 a small group of academics and practitioners met to discuss the equity risk premium (ERP). Ten years later, in 2011, a ...Time Variation in the Equity Risk PremiumWhat is considered to be the best source of information about the future equity risk premium has shifted from historical average ...The Equity Premium Puzzle RevisitedSince the 1985 publication of the original article on the equity premium puzzle, much research and controversy has surrounded the ...Equity Risk Premium MythsSeveral myths about the equity risk premium have existed for quite a while, so the time is ripe to separate myth from fact. Once ...Will Bonds Outperform Stocks over the Long Run? Not LikelyBonds have outperformed stocks over the past decade and almost matched the returns of stocks in the past 40 years, but analysis ...A Supply Model of the Equity PremiumIn 2002, Grinold and Kroner proposed a model of the equity risk premium (ERP) that linked equity returns to GDP growth. In this ...The Equity Risk Premium The equity risk premium is a long-run equilibrium concept that estimates the future excess return of the stock market over and ...Long-Term Stock Returns Unshaken by Bear MarketsStock markets have suffered through two major bear markets since 2001, and the returns for stocks, bonds, and Treasuries over the ...Reflections After the 2011 Equity Risk Premium ColloquiumDisagreement about long-term predictability of the equity risk premium continued in the 2011 forum. It is admittedly hard to be ...The Presidential Puzzle: Political Cycles and the Stock MarketThe authors find that returns in the stock market are higher under Democratic than Republican presidencies. Further, the ...Macro Economy: Fiscal and Monetary EnvironmentDaniel Clifton, Donald Rissmiller, and Jason Trennert from Strategas Research Partners share their views on the current economic ...Markets Are Global But Politics Are LocalSteve Galbraith of Maverick Capital shares his views on the current investment environment, noting that emerging markets ...The Effect of Analyst Coverage on the Informativeness of Income SmoothingCompanies that have an analyst following seem to practice income smoothing, which may convey private ...Factions and Finance in China: Elite Conflict and InflationThis book on the Chinese banking sector is one of the first to develop a framework analyzing the impact of elite politics on both ...The Stock Selection and Performance of Buy-Side AnalystsThe authors examined the selection and performance of stocks recommended by analysts at a large investment firm relative to those ...Investment Opportunities in African Markets: Potential WinnersAfrica’s natural resources and favorable demographics will lead to sustainable economic growth and prosperity. Furthermore, its ...Investment Opportunities in African Markets: Potential WinnersAfrica’s natural resources and favorable demographics will lead to sustainable economic growth and prosperity. ...Keynes the Stock Market InvestorThe authors examine the investment philosophy, strategies, and trading record of economist John Maynard Keynes in the context of ...Understanding Expected ReturnsInvestors tend to think of expected returns as a function of asset class risk, but this thinking may have led them to ...Value Investing: Investing for Grown Ups?The author describes three distinct strands of value investing. The first, passive value investing, can be traced to Benjamin ...Information Leakage Prior to Company Issued GuidanceThe authors find that information leakages prior to public earnings guidance issued by company management exist even after ...Are Stocks Really Less Volatile in the Long Run?Annualized volatility of stock returns is widely thought to be lower over long horizons than over short horizons, due to mean ...Under/Over-Valuation of the Stock Market and Cyclically Adjusted EarningsThe ratio between current earnings per share and share price (the EP ratio) is widely considered to be an effective gauge of ...An International Analysis of Earnings, Stock Prices and Bond YieldsThe authors assess the relationship between stock index prices, earnings and long-term government bonds in thirteen countries and ...A Network Value Theory of a Market, and PuzzlesBy considering the stock market as a network that impounds liquidity and information production, the authors were able to study ...Surveying Global EconomiesIn several major global economies, excessive levels of private sector debt remain a problem while some asset prices (e.g., U.S. ...What is the Risk-Free Rate? A Search for the Basic Building BlockThis article reveals common errors and provides suggestions on solutions when no government bond rate is available, when there is ...A New “Risky” World Order: Unstable Risk Premiums Implications for PracticeThis article looks at how risk premiums affect investing, valuation, corporate finance decisions, and potential shifts in ...Into the Abyss: What if Nothing Is Risk Free?A key assumption in corporate finance and investment analysis is the existence of a risk-free investment, but during the ...CFA Institute 2010 European Investment Conference BlogRead summaries of 14 key sessions from the recently concluded Third Annual CFA Institute European Investment Conference in ...Online Data - Robert ShillerThis website comprises a long history of data on components of equity returns, interest rates, inflation and housing prices. Venture Capital 101In this article, the National Venture Capital Association (NVCA) provides an introduction to the venture capital industry in the ...Benjamin Graham: Building a Profession (Take 15 Series Transcript)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Momentum – A Contrarian Case for Following the HerdIn this white paper, the author examines the historical performance of momentum strategies in equities over an 80-year time ...Lessons From Capital Market HistoryThis session will challenge you to unlearn what you have learned by examining such topics as: What’s Going On with Mr. ...Lessons From Capital Market HistoryThis session will challenge you to unlearn what you have learned by examining such topics as: What’s Going On with Mr. ...CFA Institute / INSEAD: Global Investors WorkshopDiscover how the newest practices in asset valuation, portfolio construction, and investment firm management can work for your ...CFA Institute / SDA Bocconi School of Management: Quantitative Equity Portfolio ManagementThe Quantitative Equity Portfolio Management program focuses on quantitative tools and techniques to build and manage tactical ...Korea Investment Conference Korea’s financial market has been anything but stable, but then whose has? Pervasive global problems such as European sovereign ...CFA Institute / Saïd Business School: Oxford Private Equity Programme The Oxford Private Equity Programme examines the economics driving the private equity sector and the financing models it ...CFA Institute / Harvard Business School: Investment Management WorkshopLegendary among investment executives for transforming investment thinking and firm management over the past four decades, the ...Advanced Risk and Portfolio Management Bootcamp - ARPM BootcampThe six-day course provides in-depth understanding of buy-side modeling from the foundations to the most advanced statistical and ...CFA Institute: Fifth Annual European Investment ConferenceAs the flagship event in Europe for CFA Institute, the annual European Investment Conference brings together noted researchers, ...66th CFA Institute Annual ConferenceThe risk, opportunities, and challenges facing the global investment profession are as complex as ever and investment ...Hordes of HoardersThe author explores the historically elevated $1.7 trillion of cash that has accumulated on U.S. company ...Not So Smart: How Executives Spend Their Company’s CashRecent evidence for S&P 500 Index companies seems to confirm studies that show that companies are bad at ...How the Growth Outliers Do ItThe author asks the questions, How many companies grow revenues by 5% or more each year over a 5- or 10-year ...Lessons of the 1930s: There Could Be Trouble AheadThe global financial crisis could have resulted in economic devastation equivalent to that brought on by the Great Depression. ...Stock Market Interdependence, Contagion, and the U.S. Financial Crisis: The Case of Emerging and Frontier MarketsThe recent steep decline in global equity markets was a severe and unexpected event. Although the decline started in the United ...Does the Wealth Profile of a Company Matter in Discounted Cash Flow Analysis? Valuation Implications for Investors and ManagersThe author examines whether a company’s ability to create shareholder value matters in the stock market’s discounting of future ...Tails, Fears, and Risk PremiaPrior research has tended to estimate the equity risk premium (ERP) and the variance risk premium (VRP) separately. The authors ...Bank ShotsU.S. and global banks face “one of the most challenging operating environments in history.”Large Foreign Ownership and Firm-Level Stock Return Volatility in Emerging MarketsThe authors investigate changes in the volatility of emerging market stocks after foreign investors have made large investments. ...What Segments Equity Markets?The authors examine whether globalization and financial openness have narrowed the differences in valuation between equity ...Market Drivers: Fundamentals vs. TechnicalsIs the market driver by fundamental factors, technical factors, or a mix of both?What Does Equity Sector Orderflow Tell Us about the Economy?The authors study the impact of orderflow on the macroeconomy. They suggest that relative price changes do not reflect all ...Earnings Conference Calls and Stock Returns: The Incremental Informativeness of Textual ToneCorporate disclosures are increasingly being announced via quarterly earnings conference calls. In addition to factual ...Tactical Equity Investing across Bull and Bear MarketsThe authors investigate the effect that the market state, as defined by a moving average benchmark, can have on popular stock ...Lost Economic Time: The Proust IndexThe Economist has constructed a measure to determine how much economic progress has been undone by the financial crisis. The ...Asset Growth and Future Stock Returns: International EvidenceThe authors found strong return predictive power for measures related to asset growth in the MSCI World Universe. The predictive ...Why Track Inefficiency?Challenging index design practices, the authors explore why an equally weighted version of the S&P 500 Index is a more ...The Emerging Equity Gap: Growth and Stability in the New Investor LandscapeSurveying the future of global assets, the authors forecast that emerging economies will nearly double their proportion of global ...Jump on the Post–Earnings Announcement DriftThe authors examined the potential profitability of a strategy that exploits the post–earnings announcement drifts contingent on ...Inside the Opening AuctionThe opening auctions at the NYSE and NASDAQ are integral to providing liquidity for both traders and passive investors. Some ...Comment Letter to SEC on NYSE Proposal to Establish a Retail Liquidity Program – Amendment No. 2The Impact of Basel III on Financial MarketsWill a combination of structural flaws and illogical mathematically inconsistent rules make matters worse?After the EuroFrom invalid derivatives to all-out currency war, worst-case scenarios abound.How Index Trading Increases Market Vulnerability The authors found that the rise in popularity of index trading—assets invested in index funds reached more than $1 trillion at ...Information Uncertainty and the Post–Earnings Announcement Drift in Europe Investigating the effect of earnings announcement abnormal return and of abnormal trading volume on future returns for a large ...Up!Hardest hit by the 1997–98 Asian financial crisis, Indonesia has overcome political turbulence and other problems to become a ...What Makes Stock Prices Move? Fundamentals vs. Investor Recognition The authors synthesized and extended recent research demonstrating that investor recognition is a distinct, significant ...The Information Content of the S&P 500 Index and VIX Options on the Dynamics of the S&P 500 IndexThe authors seek to determine whether information about options on the ChicagoBoard Options Exchange Volatility Index (VIX) aids ...Currency Hedged Benchmark Replication: Challenges and ImprovementsThe authors document the limitations and challenges of using currency-hedgedbenchmarks in the assessment of the performance of ...Momentum in Japan: The Exception That Proves the RuleThe author studies the “failure” of the momentum strategy in Japan.He finds that the failure, which occurred only in Japan, does ...Hedging Equity Market Risk in Hedge Fund Investing: A New ApproachThe prevailing wisdom in the investment industry before the financial crisis wasthat hedge fund performance was largely immune to ...Resolving the Presidential PuzzleThe authors examine the link between stock returns and the presidential cycle inthe United States. They investigate whether there ...Comment Letter to the European Parliament ECON Committee: Questionnaire on MiFID / MiFIR IIThe Leadership Gap“The investment industry community will be well served to develop more rigorous analytical tools to determine ...How Do You Know When You're Done?“If you are looking at a company for the first time, you may find that reading all the company releases, U.S. SEC filings, and ...Informed Traders: Linking Legal Insider Trading and Share RepurchasesLogic suggests that a link might exist between insider trades and share repurchases because of their ...Demographic Changes, Financial Markets, and the Economy Using a large sample of countries and 60 years of data, the authors found a strong and intuitive link between demographic ...Global Market Sentiment Survey 2012 The 2012 Global Market Sentiment Survey analyzes responses to a November, 2011 survey of over 58,000 CFA Institute members ...Risk Management for Institutional Funds Many investment managers agree that the traditional approach to asset allocation and risk management is “dead.” No consensus has ...Rethinking the Equity Risk Premium In 2001, a small group of academics and practitioners met to discuss the equity risk premium (ERP). Ten years later, in 2011, a ...Comment Letter to SEC on NYSE Proposal to Establish a Retail Liquidity ProgramAnalyzing Valuation Measures: A Performance Horse-Race Over the Past 40 YearsIn this article, the authors compare the investment performance of portfolios sorted on different valuation measures and find ...Short Arbitrage, Return Asymmetry, and the Accrual Anomaly Previous research has found a negative correlation between high accruals and future stock returns: the accrual anomaly. The ...Predicting Financial Distress and the Performance of Distressed Stocks The authors examine financially distressed companies’ common stock performance and discover low share prices, high levels of ...When Two Anomalies Meet: The Post–Earnings Announcement Drift and the Value–Glamour AnomalyThis study of the post–earnings announcement drift and the value–glamour anomaly finds that value stocks have greater information ...Farewell, Punch Bowl: From Inflation Targeting to Credit Targeting The approach to money, credit, and asset prices that investors have used for the past 20 years is now defunct and has to change ...The Impact of International Institutional Investors on Local Equity Prices: Reversal of the Size PremiumUsing comprehensive company-level ownership data from Japan, the authors found that the equity size premium correlates strongly ...An Alternative Measure of the “World Market Portfolio”: Determinants, Efficiency, and Information Content The market portfolio is usually defined as an aggregate of individual assets. The authors develop a new approach to building a ...The New Financial Matchmakers The author examines the benefits and potential of private market networks (PMNs). The main purpose of PMNs is to allocate ...Algorithmic Trading Usage Patterns and Their Costs Algorithmic trading has grown dramatically and now accounts for about 30 percent of institutional trading. The authors examine ...Volatile Earnings Growth, the Price of Earnings and the Value Premium The relationship among an asset’s price, present earnings, and the anticipated growth of the earnings is well established. The ...Barron’s Red Flags: Do They Actually Work? A 2009 Barron’s article identifies several phrases companies use in their U.S. SEC filings that should raise red flags for ...Inflation and the Stock Market: Understanding the Fed ModelThe authors confirm the Fed Model's established correlation between the yield on nominal bonds and the dividend yield on ...Do Investors Value Dividend Smoothing Stocks Differently? The authors find that investors place a higher value on stocks of firms that distribute smooth dividends; that institutional ...Holey Grail: How Much Capital Do Lenders Need?An estimate by The Economist of the amount of capital needed by European banks to ensure against a domino-effect collapse. The Relative Valuation of US Equities at Bear Market Bottoms: A Perspective on the Equity Risk PremiumThe authors examine equity returns, earnings growth, interest rates, and the relative valuation of US equities following the 22 ...Murdering Mr. Market: An Equity Valuation and Capital Allocation Model for Long-Term Value-InvestorsThe authors present an equity valuation and capital allocation model that is based on the investing principles of long-term ...WACC: Definition, Misconceptions and ErrorsThe author examines the weighted average cost of capital (WACC) within the context of firm valuation and addresses common ...Towards Integrated Reporting: Communicating Value in the 21st CenturyIntegrated reporting is designed to enhance and consolidate existing reporting practices and to move towards a reporting ...Chain ReactionDue diligence on supply-chain management offers clues about future performance.Agree or DisagreeCertain African markets will replace the BRIC markets as the next great global investment opportunity.Firehoses, Drinking Fountains, and Intrinsic ValueFour experts discuss the challenges of identifying key share-price drivers amid the torrent of “excruciating minutiae.”A Survey of Alternative Equity Index Strategies After reviewing the methodologies behind the more popular quantitative investment strategies offered to investors as passive ...Decomposing Global Equity Cross-Sectional VolatilityThe authors present an exact methodology for decomposing cross-sectional volatility into contributions from various factors. ...To Trade or Not to Trade? Informed Trading with Short-Term Signals for Long-Term InvestorsWhen long-term investors trade slowly changing portfolios, they are not particularly sensitive to when they should place or ...Comment Letter to IOSCO Consultation Report on Regulatory Issues Raised by the Impact of Technological Changes on Market Integrity and EfficiencyWhere the Black Swans Hide & the 10 Best Days MythThe author examines financial market outliers to determine their effect on long term portfolio performance, and addresses the ...Expert Networks: Linking Expert Mouths with Eager EarsThe author describes the uses and possible abuses of expert network companies. The potential for the conveyance of illegal ...Beyond Brinson: Establishing the Link between Sector and Factor ModelsThe authors show that the Brinson model, which is used for return attribution analysis, is a special kind of factor model. This ...Does Corporate Governance Predict Future Performance? Evidence from Hong KongThe authors use time-series data for Hong Kong companies to study how changes in the quality of corporate governance practices ...Alternative Trading Systems in Europe: Trading Performance by European Venues Post-MiFID, 2010 UpdateThe authors compare the 2010 equity trading costs of alternative European trading systems (dark pools and multilateral trading ...Corporate Governance, Valuation, and Performance: Evidence from a Voluntary Market Reform in BrazilThe authors construct an index of proxies for six good governance practices used by companies included in a premium segment of ...Equity Prices and Macroeconomic Fundamentals: International EvidenceThe author studies the interrelationship between stock prices and macroeconomic fundamentals for selected European countries and ...The Importance Of Dividends and Buybacks Ratios For Gauging Equity Values The author considers the impact of dividends and share repurchases on investors, making the case for a ratio which aggregates the ...Into the Abyss: What If Nothing is Risk Free?A key assumption in corporate finance and investment analysis is the existence of a risk-free investments, but this assumption ...The Race to ZeroThe author considers the dramatic impact that high frequency trading has had on the financial markets and discusses potential ...Sol SurvivorsAnalyzing clean tech’s dirty little secrets.Identifying Characteristics to Predict Separately Managed Account PerformanceThe authors analyzed a large sample of domestic equity separately managed accounts over the 1991–2009 period and found ...The Limits to Arbitrage Revisited: The Accrual and Asset Growth AnomaliesUsing idiosyncratic volatility as a proxy for arbitrage costs, the authors found that the highly publicized accrual and asset ...What Factors Drive Analyst Forecasts?Using survey data to judge how analyst forecasts are related to evaluations of companies’ industry competitiveness, strategic ...Analysts’ Forecasts: What Do We Know after Decades of Work?The author observes that recent research on sell-side analysts has focused disproportionately on analysts' ability to accurately ...What Fama and French’s Latest Research Doesn’t Tell UsThis article provides a primer of Fama-French's seminal work on the size and value effect in the context of a recent working ...An Investigation into Stewardship: Engagement between Investors and Public Companies, Impediments, and Their ResolutionIn the aftermath of the global financial crisis, the role of investors in overseeing the performance of boards and executive ...China's Capital Markets: The Changing LandscapeThis report reviews the evolution of China's equity, bond, and derivatives markets and how the investor mix is changing. It also ...China's Capital Markets: The Changing Landscape (Chinese Version)The Chinese version of this report reviews the evolution of China's equity, bond, and derivatives markets and how the investor ...Introduction to Industry and Company AnalysisCh. 9, Investments: Principles of Portfolio and Equity Analysis, Michael G. McMillan, CFA, Jerald E. Pinto, CFA, Wendy Pirie, ...Equity Market ValuationCh. 11, Investments: Principles of Portfolio and Equity Analysis, Michael G. McMillan, CFA, Jerald E. Pinto, CFA, Wendy Pirie, ...Analyst Following of Privatized Firms around the World: The Role of Institutions and Ownership StructureThe authors analyze factors that affect analysts’ decisions to initiate coverage on newly privatized firms and that determine the ...Does Algorithmic Trading Improve Liquidity?The authors analyze whether algorithmic trading has increased the efficiency and liquidity of the NYSE. They examine the ...Frontier Markets: What the Headlines Don’t Tell You“We need to distinguish ‘hot,’ emotionally charged news from ‘cool’ stories that can be very rewarding for ...Liquidity Level or Liquidity Risk? Evidence from the Financial Crisis Although generally considered safe assets, liquid stocks underperformed illiquid stocks during the financial crisis of ...Frontier Market Equity Investing: Finding the Winners of the FutureFrontier markets represent a multitude of distinct cultures and can be overwhelming to investors. The author examines the many ...Arbitrage Risk and Stock MispricingThe authors challenge the widely accepted notion that stock prices reflect fundamental values because deviations cause arbitrage ...Estimating the Equity PremiumThe authors estimate the equity premium by using a simulated method of moment approach that incorporates multiple moments of U.S. ...Methods of Valuation: Myths vs. RealityThe author surveys actively practicing financial analysts about their use of enterprise value to earnings before interest, taxes, ...Seasonality in the Cross Section of Stock Returns: The International EvidenceThe authors examine short- and long-term seasonal anomalies in international stock returns to determine linear predictability and ...Value, Valuation, and the Long-Run Performance of Merged FirmsThe authors examine whether mergers lead to post-acquisition changes in the intrinsic value of the acquiring companies. They find ...What’s Vol Got to Do with It?The authors examine the role of return variance in determining asset prices. They identify the variance premium as a measure that ...International Diversification Works (Eventually) Critics of international diversification observe that it does not protect investors against short-term market crashes because ...When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10-KsThe authors examine 10-Ks from 1994 through 2008 for textual tone by counting words that are generally considered negative. They ...When Are Analyst Recommendation Changes Influential?The consensus in the financial literature is that individual analyst recommendation changes do not significantly impact a stock’s ...A Simple Empirical Model of Equity-Implied Probabilities of DefaultThe authors calibrate an updated model for default prediction that improves on Altman’s Z-score model and Z″ model. The new model ...Cooking the Books: Recipes and Costs of Falsified Financial Statements in ChinaThe authors examine companies in China that issued financial restatements. They find that restatements are more common when the ...Expected Returns: An Investor's Guide to Harvesting Market RewardsAntti Ilmanen discusses expected returns of stocks, bonds, and alternative investments in the context of growth, inflation, ...NetherlandsThis report contains a brief summary of the rights shareowners enjoy in the Netherlands market. The report ...AustriaThis report contains a brief summary of the rights shareowners enjoy in the Austria market. The report also ...SpainThis report contains a brief summary of the rights shareowners enjoy in the Spain market. The report also ...ThailandThis report contains a brief summary of the rights shareowners enjoy in the Thailand market. The report also ...IrelandThis report contains a brief summary of the rights shareowners enjoy in the Ireland market. The report also ...Are You Trading Predictably? The authors find predictable patterns in stock returns. Stocks whose relative returns are high in a given half hour today ...Intermarket Analysis in the Age of Global InterdependenceSector analysis and fundamental analysis ought to have a complementary relationship.Investing in India’s Emerging ResilienceIndia has emerged from the 2008 financial crisis barely scathed and with a very bright future. Foreign ...Comment Letter to IOSCO on Issues Raised by Dark LiquidityThe Short View: Stock Picking Poised to ReturnAfter approaching record highs in the summer of 2010, correlations between stocks comprising the S&P 500 index have fallen ...Comment Letter to European Commission on the Review of the Markets in Financial Instruments DirectiveSingaporeThis report contains a brief summary of the rights shareowners enjoy in the Singapore market. The report also discusses current ...Asset Growth and Stock Returns: Evidence from Asian Financial MarketsResearch has shown a negative relationship between asset growth and stock returns in the United States. The authors ...Cross-Sectional Return Dispersion and Time Variation in Value and Momentum PremiumsThe authors study the relationships between stock return dispersion and the subsequent premiums for value and momentum ...Helping Hand or Grabbing Hand? Central vs. Local Government Shareholders in Chinese Listed FirmsThe authors analyze related-party transactions between Chinese-listed companies and their state-owned shareholders. ...Investment Issues in Emerging Markets: A ReviewEmerging markets have generated considerable interest among investors and academics. Although their returns ...Empirical Evidence of the Existence of Investable Premiums in Emerging Market Investable StocksThe author examines the impact of the level of investability on stock returns across emerging markets. Results indicate ...Ten Questions Every Institution Should Ask Their Dark Pool ProvidersThe authors survey users of dark pools and posit that institutional investors “blindly” engage in dark liquidity pool ...Can Operating Leverage Be the Cause of the Value Premium?The authors provide support for theoretical models of the value premium by demonstrating a positive and significant ...What Does the Individual Option Volatility Smirk Tell Us about Future Equity Returns?The authors examine the predictive ability of the volatility smirk on future equity returns. They discover that the ...Short Sellers and Financial MisconductThe authors find that short sellers are able to identify and focus on companies that misrepresent their financial ...Excess Cash and Stock ReturnsThe author researches the relationship between excess cash holdings and future stock returns and finds that high excess ...A Cautionary Note about Robert Shiller’s CAPEThe author evaluates why the cyclically adjusted price-to-earnings ratio (CAPE)may be biased, including changes in the ...Investments: Principles of Portfolio and Equity AnalysisIn a world of specialization, no other profession likely requires such broad, yet in-depth knowledge than that of financial ...Good Investment Fund Limited: Equity InstrumentsThis publication contains an illustrative set of financial statements of "Good Investment Fund Limited" for the year ...Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs (a review) This book provides a highly accessible and pragmatic approach to the subject of investment vehicles. For the relative newcomer ...The Structure, Regulation, and Transparency of European Equity Markets under MiFID The structures of trading venues operating in Europe are examined, and trade data are analysed to determine the transparency of ...Asymmetric Changes in Stock Prices and Investor Recognition around Revisions to the S&P 500 Index This study finds that first-time additions to the S&P 500 Index or its family experience permanent price increases; however, ...Demand and Supply and Their Relationship to Liquidity: Evidence from the S&P 500 Change to Free Float In the context of the switch to free-float weighting in the S&P 500 Index, this study of the effect of the availability of ...The Proper Care and Feeding of Great AnalystsDo great analysts possess specific skills and knowledge?Best Practices for Equity Research Analysts: Essentials for Buy-Side and Sell-Side AnalystsJames J. Valentine, CFA provides a professional guide for equity analysts, focusing on best practices for identifying and ...Exploring the Frontier Emerging Equity Markets Frontier markets offer the potential for high returns to investors who are willing to take the risk and be patient. About 85 ...Conversation with a Value Guru Value investing requires creativity, focus, and fortitude. Value investors concentrate on the long term and look for companies ...Institutional Trades Around Takeover Announcements: Skill vs. Inside InformationThe authors examine the pattern and profitability of institutional trades around takeover announcements, and find that the trades ...Predicting Stock Market Returns with Aggregate Discretionary AccrualsThe authors build on research that shows that aggregate operating accruals positively predict aggregate future stock returns. ...Not All Buybacks Are Created Equal: The Case of Accelerated Stock Repurchases The authors documented the characteristics and market performance of ASR (accelerated share repurchase) stock. They found that ...Is A Better than B? How Affect Influences the Marketing and Pricing of Financial Securities Culture and experience associate A with superior quality. In the marketing of dual-class IPOs, issuers are mindful of this ...Are Member Firms of Corporate Groups Less Risky?The authors examine Japanese keiretsu companies and the impact that such a corporate group structure has on company-level and ...Expected Volatility, Unexpected Volatility, and the Cross-Section of Stock ReturnsThe authors decompose idiosyncratic volatility into an expected component and an unexpected component and study the relationship ...Misdeeds Matter: Long-Term Stock Price Performance after the Filing of Class-Action Lawsuits Consistent with theory, this study of shareholder litigation found a broad transformation in company characteristics and risk ...Net Operating Working Capital Behavior: A First LookWorking capital policies reflect a company’s operating and financial conditions and environment. The authors seek a better ...Liquidity and Market Efficiency: A Large Sample StudyThe authors extend previous studies to examine short-horizon return predictability from past order flows. They use a ...Sell-Side School TiesThe authors test whether analysts who have an educational link with management at public companies make better recommendations ...A Reexamination of the Causes of Time-Varying Stock Return VolatilitiesThe author examines the daily return volatility of stocks during 1976–2006. He finds that the increase in volatility before 2000 ...Why Valuation Must Continue to Evolve Times of turbulence are excellent opportunities to analyze the weaknesses of applied theories. Information Transfer Effects of Bond Rating DowngradesThe authors research the impact of corporate bond rating downgrades on the equity prices of other corporations in the same ...The Behaviour of Small Cap vs. Large Cap Stocks in Recessions and RecoveriesThe author examines the relative performance of small-cap versus large cap stocks surrounding periods of peaks and troughs of ...Security Valuation and Risk Analysis: Assessing Value in Investment Decision MakingKenneth S. Hackel, CFA challenges popular valuation tools and conventions and introduces a credit-based valuation methodology ...Writing Securities Research: A Best Practice Guide, Second EditionJeremy Bolland provides securities analysts with a useful guide to best practices for their craft. Readers will learn how to ...Do Sell-Side Stock Analysts Exhibit Escalation of Commitment?The authors offer evidence that when an analyst makes an out-of-consensus forecast of a company’s quarterly earnings that turns ...Lessons from LehmanCan investors learn the right lessons from Lehman’s collapse and better detect warning signs?Disclosing Environmental RisksBy making the financial impact of environmental risks tangible, the BP disaster may accelerate disclosure trends.Everything a Young Charterholder Should Know About EnergyWill the challenge of developing new and better sources of sustainable energy provide profitable investment opportunities?3-D Investing Most investment management approaches are categorized along two dimensions: market capitalization and investment style. Has the ...Cashing In on Managerial Malfeasance: A Trading Strategy around Forecasted Executive Stock Option Grants This study examined the profitability of a trading strategy that exploits the manipulation of stock prices around the grant date ...Opportunities for Patient InvestorsAt the CFA Institute 2010 Annual Conference in Boston, Jason Zweig sat down with legendary investor Seth Klarman to gain insights ...Sales Order Backlogs and Momentum ProfitsMomentum profits are partially explained by changes in a company’s sales order backlog. Winner stocks have large positive ...The Long-Run Relationship between Stock Prices and Goods Prices: New Evidence from Panel CointegrationThe authors evaluate the long-run relationship between stock prices and goods prices and establish that stock investments provide ...Predicting Global Stock ReturnsTo avoid the biases that arise in ordinary least squares regressions for predicting global stock returns, the author uses panel ...Buy-Sell Agreements for Closely Held and Family Business OwnersBuy-sell agreements designed for private business owners to create a market and set a price for their ownership interests in the ...Liquidity and Valuation in an Uncertain WorldDuring the recent financial crisis, almost no trading took place among some financial assets, despite dealers posting bid and ask ...Style Timing with Insiders Aggregate demand by insiders predicts time-series variation in the value premium. Insider trading forecasts the value premium ...Relative Sentiment and Stock Returns The sentiment of retail investors relative to that of institutional investors was measured by comparing their respective ...Wealth Creation: A Systems Mindset for Building and Investing in Businesses for the Long Term (a review)Madden provides a systems mindset for analyzing businesses over the long term. He underscores the necessity of critically ...Comment Letter to U.S. SEC on Equity Market StructureHow Research from the High-Yield Market Can Enhance Equity Analysis Because equity analysts and high-yield analysts have different perspectives on valuation, insights from high-yield analysis can ...The Inefficient Market and the Potential Contribution of Behavioral Finance: Case ClosedContrary to majority opinion in university departments of finance, markets are not efficient; they are inefficient. Furthermore, ...Back to Basics: A Stock Picker’s MarketThe future will likely bring conditions that will constitute an excellent environment for stock pickers. History has shown that ...Comment Letter to CESR Regarding Review of Equity Markets under MiFIDThe Little Book of Big Dividends: A Safe Formula for Guaranteed Returns (a review)The author addresses dividends and how excess returns can be achieved through a simple and time-tested investment formula. He ...Equity Return Performance from a Prediction Model of Meeting or Missing Analysts’ Forecasts The author proposes a model that captures the ability and incentives of managers to meet or exceed analyst forecasts along with ...Real and Financial Industry Booms and Busts The authors investigate whether competitive industries that experience valuation, investment, and financial booms are prone to ...Expected Stock Returns and Variance Risk Premia The authors develop a stylized model to show that the difference between implied and realized variation, which they call the ...Sovereign Wealth Funds’ Impact on Debt and Equity Markets during the 2007–09 Financial Crisis The authors found that news related to the financial crisis and sovereign wealth fund investments in U.S. and European firms not ...Return Predictability along the Supply Chain: The International Evidence In this study of a sample of equities listed on the exchanges of 22 developed countries, equity returns of customer industries ...Comment Letter to CESR on Micro-Structural Issues of the European Equity MarketsBenjamin Graham, Building a Profession: Classic Writings of the Father of Security Analysis This book showcases Graham’s important contribution to remaking investment analysis into a profession. It collects, for the ...Capital Gains Overhang and the Earnings Announcement Volume Premium This study examined why stocks that experience high abnormal trading volume around earnings announcements earn high returns. The ...Can Forecasting Work?Expertise and fancy job titles don’t impress fortune.On the Structure of Analyst Research Portfolios and Forecast Accuracy The authors examine the structures of U.S. and non-U.S. brokerage firms and find that the forecast accuracy of analysts who ...Revisiting Dividend Yield Dynamics and Returns Predictability: Evidence from a Time-Varying ESTR Model Unit root tests have shown that the dividend yield is nonstationary. The author proposes a time-varying exponential ...Are the Wall Street Analyst Rankings Popularity Contests? On an industry-wide basis, tremendous resources are expended to obtain an investment edge. Investment firms and the analysts ...The Price of Sin: The Effects of Social Norms on Markets Many social scientists believe that social norms are important in shaping economic behavior and market outcomes, overriding at ...Time-Varying Risk Premiums and the Output Gap The authors document a relationship between the output gap and U.S. stock returns. The relationship is both economically and ...Put Your Money Where Your Mouth Is: Do Financial Firms Follow Their Own Recommendations? Documented evidence generally shows that analyst recommendations add value in multiple ways: revealing new information, enabling ...Rewriting History The authors examine the Thomson I/B/E/S stock recommendations database for data inconsistencies from 2000 through 2007. Relative ...Share Repurchases and Stock Valuation Models The authors examine the impact of stock repurchases on stock valuation models. They find that valuation estimates derived from ...Clairvoyant Value II: The Growth/Value Cycle This article continues the authors’ study of “clairvoyant value.” They find that the market is good at identifying growth stocks ...Conflicts of Interest and Stock Recommendations: The Effects of the Global Settlement and Related Regulations The conflicts of interest in sell-side analysts’ research as a result of links between research and investment banking, the ...Media Coverage and the Cross-Section of Stock Returns After controlling for common risk factors, the authors find that stocks with no media coverage tend to earn higher returns than ...Aggregate Earnings and Asset Prices The authors attempt to clear up the misconception that aggregate earnings of companies are a diversifiable risk with no effect ...Economic Growth and Equity Investing The performance of equity investments is inextricably linked to economic growth. Nonetheless, few studies on investing have ...Why Does DCF Undervalue Equities? The authors examine the potential for weighted average cost of capital (WACC) calculations to be biased as a result of using the ...Letter to U.S. SEC on Sub-Penny Trading on Regulated ExchangesEquity Asset Valuation, Second Edition As part of the CFA Institute Investment Series, the Second Edition of Equity Asset Valuation has been designed for a wide range ...Has the U.S. Stock Market Become More Vulnerable over Time? This study demonstrates that the cross-sectional variation of systematic risk and systematic liquidity has increased from 1963 ...Economic Growth and Equity Investing The performance of equity investments is inextricably linked to economic growth. Nonetheless, few studies on investing have ...Implications for Asset Returns in the Implied Volatility Skew This study examined the impact on future asset returns of information contained in the implied volatility skew. Future returns ...Free Cash Flow Valuation Ch. 4, Equity Asset Valuation, Jerald E. Pinto, CFA, Elaine Henry, CFA, Thomas R. Robinson, CFA, and John D. Stowe, CFA (Wiley, ...Residual Income Valuation Ch. 5, Equity Asset Valuation, Second Edition, Jerald E. Pinto, CFA, Elaine Henry, CFA, Thomas R. Robinson, CFA, and John D. ...Clairvoyant Value and the Value Effect The authors look at clairvoyant value, which is the future fair value of a stock. They examine a sample of stocks during the ...The Predictive Content of Aggregate Analyst Recommendations Studies have shown that changes to analyst recommendations help somewhat in predicting future returns at the company level. The ...Corporate Governance Ratings and Firm Performance Corporate governance has become an important factor in assessing company performance. Using ratings provided by three U.S. ...Profiting from a Contrarian Application of Technical Trading Rules in the US Stock Market The authors study the feasibility of profiting from simple technical trading rules from various market cycles after allowing for ...The “Best Corporate Citizens:” Are They Good for Their Shareholders? Business Ethics magazine publishes an annual listing of the “Top 100 Best Corporate Citizens.” Working together with KLD ...The Wages of Social Responsibility Typical socially responsible investors tilt their portfolios toward stocks of companies with high scores on social ...The Rise and Demise of the Convertible Arbitrage Strategy This article analyzes convertible arbitrage, one of the most successful hedge fund strategies. The aim of the strategy is to ...Global Systemic Risk: What We’ve Learned and the Way Forward The worldwide economy is experiencing a severe, synchronized, global recession. Aggressive policy decisions by several ...Price Trends and Patterns in Technical Analysis: A Theoretical and Empirical Examination The authors study the share-price effects of investors having a confirmation bias (i.e., the tendency to interpret new ...Cash Is King The direct cash flow method can increase transparency. Beyond Accounting Disclosure of extra-financial information is only the first step. Gender and Job Performance: Evidence from Wall Street This study concerns the relationship between gender and job performance among brokerage firm equity analysts. Women’s ...Using Auctions to Price Employee Stock Options: The Case of Zions Bancorporation ESOARS The first empirical analysis of Zions Bancorporation’s 2006 and 2007 auctions of Employee Stock Option Appreciation Rights ...The Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis (a review)The technicians featured in this book come across as sincere in their belief that the patterns of past price movements contain ...Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions (a review) Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions is a handbook for aspiring investment ...Short-Sale Strategies and Return PredictabilityThe authors examine trading strategies used by short sellers of U.S. stocks listed on the NYSE and NASDAQ during 2005. Consistent ...Do Managers Withhold Bad News?The authors examine whether managers withhold or delay the release of bad news compared with good news. They conclude that, on ...Does Better Corporate Governance Result in Higher Valuations in Emerging Markets? Another Examination Using a New Data SetThe authors investigate the importance of corporate governance practices relative to company value by using a unique dataset. ...Stocks as Lotteries: The Implications of Probability Weighting for Security PricesBy applying cumulative prospect theory, the authors develop a model to determine equilibrium prices for assets that have skewed ...Dividends and Price MomentumA momentum strategy of buying winners and selling losers performs better with non-dividend-paying companies ...When Is Stock Picking Likely to Be Successful? Evidence from Mutual FundsConsistent with a costly arbitrage equilibrium in which arbitrage costs insulate mispricing, this study finds that mutual fund ...G ForcesHow can the quality and use of governance information be improved?The Outlook for Real Estate FundsWhat lessons can be learned from the 18-year real estate cycle, and where are the opportunities now?Does Freezing a Defined-Benefit Pension Plan Increase Company Value? Empirical Evidence This study empirically tests whether freezing or closing a defined-benefit (DB) pension plan increases the sponsoring company’s ...Liquidity and the Post-Earnings-Announcement Drift The post-earnings-announcement drift is a longstanding anomaly that conflicts with market efficiency. This study documents that ...The Wages of Social Responsibility Typical socially responsible investors tilt their portfolios toward stocks of companies with high scores on social ...Fooling Some of the People All of the Time: A Long Short Story (a review)In Fooling Some of the People All of the Time: A Long Short Story, David Einhorn provides a detailed account of his short sale of ...Is the Trend Your Friend?Some traders look to seasonal patterns to improve options-trading profitability.The Pitfalls of Leveraged and Inverse ETFsUnderstanding how return volatility adversely affects wealth accumulation is critical.Know Your RightsA new manual enables global, cross-market comparisons of shareowner rights.Should Good Stocks Have High Prices or High Returns? Using a design involving a between-subjects experimental manipulation, this study surveyed 742 Finnish financial advisers about ...Do Security Analysts Reduce Noise? This study investigates the role of security analysts in reducing noise in stock price fluctuations. Using a sample of analyst ...Home-Biased Analysts in Emerging MarketsThe financial press has written much about conflicts of interest among sell-side analysts in developed markets. Little ...The Dog That Did Not Bark: Insider Trading and CrashesThe authors develop a model that suggests insiders sell based on private negative information but eventually stop ...Does Innovation Cause Stock Market Runups? Evidence from the Great CrashThe conventional view of the stock market at the end of the 1920s is that it was overvalued as a result of investor ...The Cost of Socially Responsible InvestingSocially responsible investing can be costly. The cost depends on manager skill, how stringently the manager defines ...Going Negative: What to Do with Negative Book Equity StocksThe authors evaluate the effect of negative book equity stocks on the value premium. They provide evidence that ...Investor Sentiment and Corporate DisclosureVoluntary disclosure of long-horizon earnings forecasts during the 1996–2004 period is used to examine whether ...ModelsThis article analyzes the methodology of modeling in the physical sciences and in finance. Whereas hobbyists’ models ...Do Investors Value Smooth Performance? Earnings smoothing arises from management’s use of accruals to provide a desirable flow of earnings that will result ...How Much New Information Is There in Earnings?The authors measure the relative importance of earnings announcements in providing new information about share prices. ...The Only Game in Town: Stock-Price Consequences of Local BiasResearch has shown that investors within a country have a tendency to hold the stock of local companies. The result is ...When Is Stock Picking Likely to Be Successful? Evidence from Mutual Funds Consistent with a costly arbitrage equilibrium in which arbitrage costs insulate mispricing, this study finds that mutual fund ...Trading Volume and Stock Investments Previous studies suggest that trading-volume measures may proxy for a number of factors, including liquidity, momentum, and ...Applied Behavioral Finance: White Swans, Revulsion, and ValueCurrent market conditions, dire as they are, represent not a black swan but a predictable surprise. Unfortunately, ...Settling DownThe global research settlement has altered the research business, but a key provision is due to expire soon.Information OverloadCan information technology help asset managers improve research?Asset Growth and the Cross-Section of Stock ReturnsTotal asset growth is examined as a predictor of returns during the 1968–2003 period. Results support a strong negative ...Do Local Analysts Know More? A Cross-Country Study of the Performance of Local Analysts and Foreign AnalystsThe authors of this study consider the theory that local analysts have an advantage over more distant analysts. They ...A Comprehensive Look at the Empirical Performance of Equity Premium PredictionThe authors review the evidence on the ability of linear models to predict the equity premium (i.e., the difference ...Expected Inflation and the Constant-Growth Valuation ModelThe authors investigate the validity of the constant-growth valuation model when factoring in expected inflation. They ...Earnings and Equity Valuation in the Biotech Industry: Theory and EvidenceIn this article, the authors examine the effect of the quality of a company’s investments and uncertainty about that ...Deep-Value Investing, Fundamental Risks, and the Margin of SafetyAll investors have the option not to act on an investment opportunity. The option to wait for a better opportunity has ...Suppressed Negative Information and Future UnderperformanceGood news travels rapidly, but bad news may not travel. The author finds that a decrease in analyst coverage of a ...Shorting Companies That Restate Previously Issued Financial StatementsThe authors study whether stock prices decline when companies announce that their previously issued financial ...Leveraged ETFs: A Risky Double That Doesn’t Multiply by TwoLeveraged exchange-traded funds are a new investment vehicle designed to deliver a multiple—commonly two times—of the ...Accruals, Capital Investments, and Stock ReturnsThe evidence from this study shows that the “accruals anomaly” and the “capital investment anomaly” are distinct, even ...The Accruals Anomaly and Company SizeResearch has shown that a trading strategy based on publicly available accounting accrual information can earn abnormal ...Models This article analyzes the methodology of modeling in the physical sciences and in finance. Whereas hobbyists’ models aim for ...A Moving TargetGiven constant change, valuing investment research remains a challenge.From Wall Street to the Great Wall: Investment Opportunities in ChinaMost investors, including institutional investors, are underexposed to China, despite the fact that it is the fastest ...Creating a “Smart” Conditional Consensus Forecast The study examined analyst forecasts of 26 macroeconomic statistics for August 1998 through March 2007. The four research ...Nonlinear Mean Reversion in Stock PricesThis study provides new evidence of mean reversion of stock market returns. It shows that the speed of mean reversion ...Are There Long-Run Implications of Analyst Coverage for IPOs?Investment banks try to persuade their IPO clients that the research services they provide are critical to the ...First Come First DisservedThe authors investigate market reactions to early versus late earnings announcements of companies in similar ...How Does Investor Sentiment Affect the Cross-Section of Stock Returns?The authors present evidence that investor sentiment has a larger effect on the stocks of companies that are difficult ...Which Shorts Are Informed?NYSE SuperDOT short sales order flow data during the 2000–04 period are used to assess whether short sellers are ...Are Analysts All Alike? Identifying Earnings Forecasting AbilityThe authors investigate the earnings forecasting ability of analysts and provide evidence that quality differentials ...Do Core and Non-Core Cash Flows from Operations Persist Differentially in Predicting Future Cash Flows?The authors examine whether disaggregating cash flow data into component cash flows improves cash flow predictability. ...More Than Words: Quantifying Language to Measure Firms’ FundamentalsIn this article, the authors ask whether qualitative information in company-specific news stories can be used to ...China’s Exchange Traded Fund: Is There a Trading Place Bias?Previous research shows mixed results when investigating the existence of trading place bias in equity returns. The ...The Persistence and Pricing of the Cash Component of EarningsThe authors investigate the persistence of three cash components of earnings and find that accruals are less persistent ...Isolating the Information Content of Equity Analysts’ Recommendation Changes, Post Reg FDThe authors examine the value of equity analysts’ recommendation changes subsequent to the passage of Regulation Fair ...Buy-Side vs. Sell-Side Analysts’ Earnings ForecastsThe study reported here is a comparison of the earnings-forecasting performance of analysts at a large buy-side firm ...Quarterly Accruals or Cash Flows in Portfolio Construction?Using quarterly and rolling four-quarter data, this study explores the incremental roles of accruals and net operating ...An Examination of Value Line’s Long-Term ProjectionsPrevious researchers have examined the performance of Value Line’s timeliness indicator (an indicator of short-term ...Accruals, Capital Investments, and Stock Returns The evidence from this study shows that the “accruals anomaly” and the “capital investment anomaly” are distinct, even though ...The Accruals Anomaly and Company Size Research has shown that a trading strategy based on publicly available accounting accrual information can earn abnormal returns ...Long-Term Price Effect of S&P 500 Addition and Earnings Quality When a company is added to the S&P 500 Index, it receives a positive price response. Several explanations for this effect ...Pre-Issue Investor Optimism and Post-Issue Underperformance Prior studies have documented long-run stock market underperformance after security offerings. Some studies conjectured that the ...Employee Stock Option Valuation with an Early Exercise Boundary Many companies are recognizing that the Black–Scholes formula is inappropriate for employee stock options (ESOs) and are moving ...The Anatomy of an LBO: Leverage, Control, and ValueA typical leveraged buyout (LBO) has three components. The acquirers (1) borrow a significant portion of a publicly ...Considering the AlternativesEvaluating alternative research providers is a new challenge for many firms.Frontier MarketsInvestors are going beyond emerging markets and blazing new trails. What are the potential risks and rewards?Green AlphaCan investing based on environmental, social, and governance factors enhance performance? Some investors are ...Do Affiliated Analysts Mean What They Say?The equity market’s reaction to recommendations from affiliated and independent analysts during the 1994–2005 period is ...The Expected Value PremiumThis study uses dividend growth rates to determine whether an expected value premium exists ex ante. The authors find ...Individual Investor Trading and Stock ReturnsThe authors examine the relationship between net individual investor trading and short-horizon returns for all common ...The Long-Lasting Momentum in Weekly ReturnsExtreme one-week stock returns reverse in the short run. Returns during the subsequent 52 weeks, however, are in the ...Challenges in Quantitative Equity ManagementSince the late 1990s, a large percentage of assets under management has flowed into quantitatively managed funds, ...Affect in a Behavioral Asset-Pricing ModelStocks, like houses, cars, watches, and other products, exude “affect”—that is, they are considered good or bad, ...Where Is the Value Premium?The value premium is driven by 7 percent of the stock market. The 93 percent of market capitalization held most by ...Market Bailouts and the ‘Fed Put’Buy-Side vs. Sell-Side Analysts’ Earnings Forecasts The study reported here is a comparison of the earnings-forecasting performance of analysts at a large buy-side firm with the ...Valuing Illiquid Common Stock Illiquid common stock is worth less than stock that can be readily sold because the investor incurs an opportunity cost by being ...How Variation in Signal Quality Affects Performance The information coefficient (IC), the correlation between forecasted and realized return, is a popular measure of signal ...Stock Repurchases and the EPS Enhancement Fallacy A common belief among practitioners and academics is that the increased EPS associated with a stock repurchase creates value for ...Long-Term Impact of Russell 2000 Index RebalancingThe study reported here examined the long-term impact of Russell 2000 Index rebalancing on portfolio evaluation. A buy-and-hold ...You Shouldn't Need ESP to Understand ESGA new manual looks at environmental, social, and governance factors in company reports.Managing Portfolios in a World of Multiple BubblesAsset-class bubbles present a challenge for investors. The U.S. Federal Reserve Board has responded to the bursting of ...Lifting the Veil on 130/30 StrategiesShort-extension strategies can increase a portfolio’s information ratio and thus its efficiency and can be used with a range ...Active Extensions in the Fund-Level ContextEquity beta is overwhelmingly the most important component of a fund’s volatility. But because 130/30 active extension ...Anatomy of the Bear: Lessons from Wall Street’s Four Great Bottoms (a review)The author of this interesting book weaves together historical events with investor sentiment surrounding the great ...The Standard & Poor’s Guide to Selecting Stocks (a review)This easy-to-comprehend and instructive book informs the reader about the numerous websites that provide (generally at ...The Value of LeadershipIs behavioral transparency more telling than financial transparency?Quarterly Accruals or Cash Flows in Portfolio Construction? Using quarterly and rolling four-quarter data, this study explores the incremental roles of accruals and net operating cash ...Asset Fire Sales (and Purchases) in Equity MarketsMutual funds that experience large outflows of funds must quickly reduce their asset holdings, which generates sales at ...Asset Pricing in China’s Domestic Stock Markets: Is There a Logic?Chinese stock markets have been characterized as being relatively irrational in their security pricing. The authors ...Asymmetries in Stock Returns: Statistical Tests and Economic EvaluationThe authors provide a model-free test for unequal correlations in which stocks move more often with the market during ...Do Mutual Funds Time the Market? Evidence from Portfolio HoldingsAlthough existing literature has documented that stock market returns in the aggregate are predictable, other studies ...Liquidity and Expected Returns: Lessons from Emerging MarketsA common, widely held view is that liquidity is priced. In other words, securities with returns that are positively ...Patterns in Analysts’ Long-Term Earnings ForecastsMuch literature in the field of investments is devoted to studying the significance of the earnings estimates of ...Importance of Style Diversification for Equity Country SelectionThe authors find that style diversification—combining fundamental and momentum variables—delivers significantly higher ...Improved Forecasting of Mutual Fund Alphas and BetasApplying an ordinary least-squares (OLS) model to identify a mutual fund manager with special talents incurs ...Challenges in Quantitative Equity Management (corrected July 2008) Quantitative equity management has mushroomed recently and now represents a respectable fraction of equity asset management. But ...Does Algorithmic Trading Improve Liquidity?The authors analyze whether algorithmic trading has increased the efficiency and liquidity of the NYSE and find that the increase ...Where Is the Value Premium? The value premium is driven by 7 percent of the stock market. The 93 percent of market capitalization held most by institutional ...Equity Returns at the Turn of the Month The turn-of-the-month effect in U.S. equities is found to be so powerful in the 1926–2005 period that, on average, investors ...Affect in a Behavioral Asset-Pricing Model Stocks, like houses, cars, watches, and other products, exude “affect”—that is, they are considered good or bad, beautiful or ...When Minnow Swallows WhaleWill small companies with big appetites give investors indigestion?Comparing the Stock Recommendation Performance of Investment Banks and Independent Research FirmsThe authors investigate the stock recommendations of investment banks and independent research firms over the 1996–2003 ...Conflicts of Interest in Sell-Side Research and the Moderating Role of Institutional InvestorsSell-side analysts may be pressured by their firm’s investment banking and brokerage divisions to provide more ...The Dynamics of Earnings Forecast ManagementThe authors analyze how companies manage earnings—particularly, “talking down” earnings forecasts immediately prior to ...Enhanced Active Equity Portfolios Are Trim Equitized Long-Short PortfoliosThe authors compare an equitized market-neutral portfolio with an enhanced active portfolio and find that the market ...Momentum and Credit RatingThe capital asset pricing model anomaly—momentum profits from buying past winners and selling past losers—is not ...Optimal GearingPrevious research has identified the impact that constraints and various costs can have on the implementation ...The Risk Return Tradeoff in the Long Run: 1836–2003Although the risk–return trade-off is fundamental to finance, the empirical literature has offered mixed results. The ...Supply and Demand Shifts in the Shorting MarketThe authors use a unique identification strategy to isolate the effect of shorting market activities on stock prices. ...The Adjusted Earnings YieldThe earnings yield, determined by the ratio of reported earnings to price, is frequently used to predict real return. ...Turn the Beat AroundExperts share tips on finding good turnaround opportunities.Passion for Reality: Paul Cabot and the Boston Mutual Fund (a review)This biography is an intelligent and well-written account of the career of an important figure in the formation of the ...Valuing Commercial Real Estate Portfolios: Public vs. Private Market PerspectivesHigh levels of liquidity and a shift in investing from growth to income have led to high values in commercial real ...Behavioural InvestingMr. Montier applies a broad range of behavioral finance principles to the institutional investor through a series of stand-alone ...The Book-to-Price Effect in Stock Returns: Accounting for LeverageThe book-to-price ratio (B/P) by itself is positively related to subsequent stock returns, and two subcomponents of B/P, ...Disagreement and the Stock MarketThe authors illustrate the importance of the joint behavior between stock prices and trading volume by using disagreement models. ...Efficiency and the Bear: Short Sales and Markets around the WorldA common belief among regulators is that short-sale restrictions reduce the relative severity of panics. The increased popularity ...Firm-Specific Attributes and the Cross-Section of MomentumThe authors attempt to identify whether it is possible to use company-specific microeconomic factors, such as revenues, costs, ...Giving Content to Investor Sentiment: The Role of Media in the Stock MarketThis study examines the influence of media on the stock market. Using the Wall Street Journal’s “Abreast of the Market” column, ...Investor Sentiment in the Stock MarketThe authors look at the role of sentiment in the stock market. They quantify sentiment and determine which stocks are most likely ...MRI and SRI Mutual Funds: A Comparison of Christian, Islamic (Morally Responsible Investing), and Socially Responsible Investing (SRI) Mutual FundsThe authors examine the overlap among the investment goals and constituents of Christian funds, Islamic funds, and socially ...Stock Return Predictability: Is It There?Previous research has found that dividend yields forecast stock returns at long time horizons. Using more appropriate statistical ...Value and Growth, Theory and PracticeThe author examines growth stocks versus value stocks and dispels the common misconception that value beats growth. Using a value ...What Are Stock Investors’ Actual Historical Returns? Evidence from Dollar-Weighted ReturnsFor the NYSE and Amex, the author finds that dollar-weighted returns are 1.9 percent per year lower on average than ...Measuring Free Cash Flows for Equity Valuation: Pitfalls and Possible SolutionsThe authors describe problems with common cash flow metrics and provide advice on how to calculate cash flow metrics that ...110 Common Errors in Company ValuationsThe authors describe 110 common errors seen in company valuations performed by financial analysts, investment banks, and ...The Adjusted Earnings YieldThe earnings yield, determined by the ratio of reported earnings to price, is frequently used to predict real return. ...Trading Patterns and Excess Comovement of Stock ReturnsIn April 2000, 30 stocks were replaced in the Nikkei 225 Index. The unusually broad index redefinition allowed for a study of the ...In the RoughIndependent research is in a difficult spot, but some players still have a shot at success.Impact ZoneSurf’s up for shareholder activists in Asia. But are they heading for a wipeout?Prognostications and PostulationsDoes cash flow provide better visibility than earnings?A Good QuestionAre client commission arrangements (CCAs) good for investors?Do Industries Lead Stock Markets?In this article, the authors investigate whether the performance of certain industries can predict, with a lead, broader market ...On the Importance of Measuring Payout Yield: Implications for Empirical Asset PricingPrevious research has investigated the implications of using dividend yield for asset pricing. However, these studies sometimes ...Stock Returns, Dividend Yield, and Book-to-Market RatioThe popular Campbell–Shiller dividend yield model suffers from instability of corporate dividend policy, and the Vuolteenaho ...Who Is Afraid of Reg FD? The Behavior and Performance of Sell-Side Analysts Following the SEC’s Fair Disclosure RulesThe U.S. SEC’s Regulation FD (Fair Disclosure) was adopted to “level the playing field” in the dissemination of corporate ...Measuring Investor Sentiment in Equity MarketsResearch into the relationship between investor sentiment and asset prices suggests that sentiment may sometimes describe ...Firm, Strategic Group, and Industry Influences on PerformanceA stream of published research by strategy scholars has found that variation in performance is greater within industries than it ...Long-Run Returns Following Open Market Share RepurchasesDouble Surprise into Higher Future ReturnsPost-earnings-announcement drift is the well-documented ability of earnings surprises to predict future stock returns. Despite ...Muddy WatersCan enterprise risk management help analysts and companies plumb the depths of risk?Special EffectsShould equity analysts adjust their models for foreign currency exposure?Green Investing: Why It Is Different This TimeSince 2004, venture capital firms have doubled their investments in the field of green investing. At times in the past, ...Being ThereAre analysts who make company site visits delusional?Blowing Bubbles in the Punch BowlInvestors can learn a lot by studying the history of overvalued companies. Like how to spot the warning signs in the future.Follow the MoneyDoes cash flow provide better visibility than earnings?Front Running on the Front BurnerSEC examination into front running addresses concerns of CFA Institute Centre for Financial Market Integrity.Interaction of Stock Return Momentum with Earnings MeasuresExamination of the interaction of stock return momentum with various earnings measures finds that large-capitalization companies ...Can Mutual Fund “Stars” Really Pick Stocks? New Evidence from a Bootstrap AnalysisThe authors study the performance of U.S. open-end domestic equity mutual funds over the period from 1975 to 2002. The authors ...Downside RiskThe prices of some assets decline more in falling markets than they advance in rising markets. Rational investors would likely ...The Equity Premium: Consistent with GDP Growth and Portfolio InsuranceTwo macroeconomic equity premium models are derived and tested for consistency with historical data. The first model illustrates ...Minimum-Variance Portfolios in the U.S. Equity MarketNew econometric techniques coupled with increased computing power allow practitioners to construct minimum-variance portfolios ...Profitability, Investment and Average ReturnsIn this article, the authors develop empirical models to explain the effects of companies’ profitability and investment on stock ...The Extreme Future Stock Returns Following I/B/E/S Earnings SurprisesAn alternative definition of earnings surprise leads to larger and longer-lasting excess returns relative to the methodology ...Stock Price Reaction to Public and Private InformationThe author uses a series of theoretical models to empirically test the effect of information on stock price movement after ...Strength of Analyst Coverage Following IPOsThe authors investigate whether companies with poor aftermarket performance are given favorable recommendations by analysts who ...Investor Overconfidence and Trading VolumeThe authors find that trading volume is positively related to past returns, both for marketwide and individual security turnover. ...Liquidity and Autocorrelations in Individual Stock ReturnsThe authors document short-run price reversals in markets for individual stocks associated with noninformational trading. These ...The Value Premium and the CAPMPrevious research has shown that value stocks have higher returns than growth stocks—a difference referred to as the value ...Presidential Election Uncertainty and Common Stock Returns in the United StatesThe Relationship between the Value Effect and Industry AffiliationStock Return Momentum and Investor Fund ChoicesAre Cover Stories Effective Contrarian Indicators?Headlines from featured stories in Business Week, Fortune, and Forbes were collected for a 20-year period to determine whether ...Causes and Seasonality of Momentum ProfitsWith Januaries (a month in which lagged “losers” typically outperform lagged “winners”) excluded, the average monthly return to a ...Is Cash Flow King in Valuations?Contrary to the common perception that operating cash flows are better than accounting earnings at explaining equity valuations, ...Residual Income Approach to Equity Country SelectionThe predictive power for country selection of expected returns estimated through the residual income model is examined through ...Interest Rate Swaps: Accounting vs. EconomicsWith interest rate swaps being the most widely used of all financial derivative contracts, financial analysts and engineers ...FASB’s Quick Fix for Pension Accounting Is Only First StepHidden liabilities, understated expenses, and discretionary management assumptions make pension accounting controversial. ...Fed UpCan following the Fed help equity analysts pick winners?Sell-Side and Buy-Side Research: Evidence and Future ModelsSell-side research is being squeezed for funding while funding for buy-side research continues to grow. But ...The Equity Risk Premium: Essays and Explorations (A review)Two leading researchers in the field have collected their essays on the equity risk premium and present them with ...Outperform with Expectations-Based Management: A State-of-the-Art Approach to Creating and Enhancing Shareholder Value (a review)This practical handbook for managers (which is also highly useful for investment analysts) provides arguments and a ...Company Valuation Methods: The Most Common Errors in ValuationsThe author evaluates the most widely used company valuation methods, including balance sheet-based methods, income ...The Information in Option Volume for Future Stock PricesThis article sheds light on the information content of options volume (put–call ratio) for the underlying stock returns. Results ...Candlestick Technical Trading Strategies: Can They Create Value for Investors?The authors investigate the profitability of candlestick technical analysis, which generates signals based on the relationship ...Do IPOs Really Underperform in the Long-Run? New Evidence from the Canadian MarketUnlike their American counterparts, Canadian initial public offerings (IPOs) do not underperform in the long run. These results ...The History and Performance of Concept StocksThe authors study the long-term performance of “concept stocks,” which they define as those stocks in the 91st–100th percentiles ...Industry Concentration and Average Stock ReturnsThis paper integrates literature in industrial organization with financial economics, and its main premise is quite intuitive. ...Investor Sentiment and the Cross-Section of Stock ReturnsClassical finance theory suggests that in efficient markets, rational investors hold diversified portfolios and security prices ...Addition to the Nikkei 225 Index and Japanese Market Response: Temporary Demand Effect of Index ArbitrageursThe authors investigate the temporary impact on a stock’s price following the announcement that the stock will be added to the ...Market Reaction to Changes in the S&P SmallCap 600 IndexThe authors examine the effects on stock price, trading volume, and institutional ownership subsequent to changes in the ...S&P 500 Index Changes and Investor AwarenessThe authors document that, on average, companies added to the S&P 500 Index experience a permanent price increase, whereas ...Accounting Restatements: Are They Always Bad News for Investors?The authors examine the relationship between accounting restatements and their impact on equity returns. The literature has ...Do Investors Capture the Value Premium?The authors investigate style investing and fail to find evidence of a value premium in equity indices, mutual funds, or large ...Value Destruction and Financial Reporting DecisionsThe comprehensive survey reported here allowed analysis of how senior U.S. financial executives make decisions related to ...Do a Firm’s Equity Returns Reflect the Risk of Its Pension Plan?Public vs. Private EquityPerpetual MotionA new study looks at trends in quantitative equity portfolio modeling. This article includes a sidebar written by Intertek Group ...Beyond CategoryThis article addresses the following key points: • In backtests, fundamental indexes report higher returns with lower volatility ...From Overload to OverdriveThis article addresses the following key points: • 1.2 million to 2 million investment research reports, notes, and e-mails are ...P/Es and Pension Funding RatiosSome evidence supports the intriguing conjecture that P/Es in the U.S. market may decline in times of both significantly lower, ...The Equity Risk Premium: An Annotated Bibliography The equity risk premium is broadly defined as the difference between the expected total return on an equity index and the return ...Conversation with a Money MasterBill Miller, CFA, is chairman and chief investment officer at Legg Mason Capital Management, Inc., and was named “The Greatest ...On Low-P/E InvestingJohn B. Neff, CFA, was a portfolio manager at the Vanguard Group for 31 years, during which time he successfully managed the ...Value Destruction and Financial Reporting DecisionsThe comprehensive survey reported here allowed analysis of how senior U.S. financial executives make decisions related to ...The Misuse of Expected ReturnsMuch textbook emphasis is placed on the mathematical notion of expected return and its historical estimate via an arithmetic ...Competing for Capital: Investor Relations in a Dynamic World (a review)Within a broad overview of the functions and responsibilities of the investor relations professional, this book focuses on the ...Can Growth Opportunities Explain the Diversification Discount?The authors test the proposition that common stock of diversified companies sells at a discount because diversified companies ...Do Accurate Earnings Forecasts Facilitate Superior Investment Recommendations?The authors investigate whether analysts who have better accuracy of earnings forecasts have better buy/sell investment ...Expected Earnings Growth and Portfolio PerformanceThe authors use stochastic dominance tests to find whether the superior performance of value portfolios arises from unknown risk ...The Impacts of Index Rebalancing and Their Implications: Some New Evidence from JapanThe author examines Nikkei 225 rebalancings from 1970 to 2002 and finds statistical evidence of permanent price and volume ...The January Barometer: Further EvidenceThe authors reexamine whether stock returns in January predict returns over the subsequent 11 or 12 months. The study separates ...On Russell Index ReconstitutionThe author examines the index effect with respect to a number of Russell indices and investigates which of the competing theories ...Premiums-Discounts and Exchange Traded FundsExchange traded funds (ETFs), unlike their mutual fund cousins, generally trade at fair value relative to their underlying stock ...Would There Ever Be Consensus Value and Source of the Equity Risk Premium? A Review of the Extant LiteratureOngoing debate exists about the size and source of the equity risk premium, one of the most important concepts in finance. The ...Asset Float and Speculative BubblesThe authors model the relationship between asset float (tradable shares) and speculative bubbles. They find that bubble behavior ...Dividend Payout and Future Earnings Growth Because dividends reduce the funds available for investment, many market observers and investors associate high dividend payout ...A Great Company Can Be a Great InvestmentA classic investment mistake is to confuse a great company with a great investment. It is a mistake because a company’s ...The January EffectAnalysis of broad samples of value-weighted and equal-weighted returns of U.S. equities documents that abnormally high rates of ...Earnings Quality Analysis and Equity ValuationFor years, a widely held belief was that markets are efficient and that fundamental analysis is futile. But ...Expectations Investing: Reading Stock Prices for Better ReturnsInvesting relies on expectations, and revisions in expectations trigger changes in stock prices. Accurately ...Finding Alpha via Covered Index WritingCovered S&P 500 Index call strategies have, on average, outperformed the S&P 500 Index over the past 15+ years while ...Why Company-Specific Risk Changes over TimeCompany-specific risk climbed steadily between 1962 and 1999 in the U.S. market but fell sharply between 2000 and 2003. This ...An IFRS 2 and FASB 123 (R) Compatible Model for the Valuation of Employee Stock OptionsAlthough accounting standards boards have recently issued standards requiring companies to recognize employee stock options as an ...The Impact of Performance-Based Compensation on MisreportingThe authors examine companies that misreported their financials and were forced to restate earnings. They find a high positive ...The Capacity of an Equity StrategyAs the assets under management of an equity strategy increase, the ability to increase alpha is constrained. This constraint has ...The Impact of Inflation Measures on the Real Returns and Risk of U.S. StocksThe authors empirically examine the most prominent measures of inflation and present a new measure for which no comparable ...Labor Income and Predictable Stock ReturnsInvestors have two sources of income to fund consumption: labor income and income from their investments. The mix between the two ...On the Out-of-Sample Predictability of Stock Market ReturnsThe author analyzes out-of-sample predictability of stock market returns. The consumption–wealth ratio and market variance are ...Pension Plan Funding and Stock Market EfficiencyAccounting regulations require that if a loss of more than 10 percent occurs in a pension plan, the company has to amortize the ...R2 Around the World: New Theory and New TestsRecent research finds that R2 (coefficient of determination) values in regressions of individual stock returns in an expanded ...The Current State of Asia-Pacific Stock Exchanges: A Critical Review of Market DesignThe authors summarize the differences in design and operation among 10 east Asian stock exchanges. They base their summary on ...When Does R&D Expense Distort Profitability Estimates?The authors develop a model that determines when return on assets (ROA) is more likely to be distorted by the immediate expensing ...Are Common Stocks a Hedge against Inflation?Tax-paying equity investors in the United Kingdom are insulated from losses in real wealth caused by inflation over long periods ...Trends in Quantitative FinanceThis introduction to recent developments in modeling equity returns provides a plain-English, formula-free review of quantitative ...The Cross-Section of Volatility and Expected ReturnsDividends, Stock Repurchases, and ValuationDo the Fama–French Factors Proxy for Innovations in Predictive Variables?Empirical Evidence on Capital Investment, Growth Options, and Security ReturnsHow Do Analyst Recommendations Respond to Major News?Terms of EngagementCFA Centre joins efforts to reverse overemphasis on short-term performance.Cash Flows, Accruals, and Future ReturnsThis study explored the “accrual anomaly.” The study is unique because it analyzed originally reported—unrestated—quarterly data ...Do We Accept Accrual Profits at Our Peril?The study described documented evidence that informed traders use their proprietary information on accrual quality to trade ...A Great Company Can Be a Great InvestmentA classic investment mistake is to confuse a great company with a great investment. It is a mistake because a company’s ...Corporate Governance Practices: Impact on ValuationWhether a link exists between corporate governance (good or bad) and valuation is not clear. But what is ...Under PressureThis article addresses the following key points: • Anecdotes abound of analysts pressured to modify opinions to appease clients ...Accentuate the NegativeThis article addresses the following key points: The explosion of hedge funds and the advent of long–short ...Patent NonsenseRestoring sanity to the valuation of intellectual property. TiltIs it time to tilt the portfolio toward growth and away from value or vice versa? Social GracesShould social factors be included in valuation models? Some firms are betting on it. Cite UnseenWhen Anne Casscells saw people on Wall Street comparing apples to oranges, she co-authored a paper that was never published but ...Effect of Institutional and Firm-Specific Characteristics on Post-Privatization Performance: Evidence from Developed CountriesThe authors investigate whether newly privatized companies in developed economies experience improvements in financial and ...Liberalization, Corporate Governance and the Performance of Privatized Firms in Developing CountriesFactors that influence the performance of 230 newly privatized firms (NPFs) from 32 developing countries over the 1980–99 period ...Governance Mechanisms and Equity PricesResearchers are increasingly focused on the importance of corporate governance mechanisms for financial performance and the stock ...The Ability of Earnings to Predict Future Operating Cash Flows Has Been Increasing—Not DecreasingPrevious research found that the explanatory power of earnings for concurrent stock prices has decreased over time. However, the ...Dilution Is a Drag…The Impact of Financings in Emerging MarketsBecause emerging markets can usually offer higher diversification benefits and returns, they have been a popular subject for ...Operating Performance Following Dividend Decreases and OmissionsThe author examines the operating performance of companies with dividend decreases or omissions using quarterly data from 1980 to ...Tax Rates and Stock Returns: An Empirical Analysis of the Information Content of Corporate Tax RatesThe authors explore the information content of corporate tax rates by analyzing the effective tax rates of S&P 500 Index ...The Two Faces of Analyst CoverageThe level of analyst coverage received by a company can be related to the expected amount of investment banking transactions. A ...Is the Book-to-Market Ratio a Measure of Risk?The authors investigate whether the ratio of book value to market value serves as a suitable risk measure when using a ...Returns and Investor Behavior in Taiwan: Does Overconfidence Explain This Relationship?The paper seeks to determine whether Taiwanese investors exhibit behavioral investing patterns consistent with overconfidence. It ...Economic Growth and Equity ReturnsThe author reports a negative relationship between per capita income growth and real equity returns and then presents arguments ...Long-Term Returns on the Original S&P 500 CompaniesThe S&P 500 Index is continually updated, with approximately 20 companies added each year and an equal number dropped. In the ...Short Interest, Institutional Ownership, and Stock ReturnsEffect of Reg FD on Information in Analysts’ Rating ChangesA rich literature examines the effects of analysts’ recommendations on stock prices, and literature is developing on the effect ...Dividend Payout and Future Earnings Growth Because dividends reduce the funds available for investment, many market observers and investors associate high dividend payout ...Deals from Hell: M&A Lessons That Rise Above the Ashes (a review)This readable volume analyzes old and new merger and acquisition failures (and successes) to extract six common factors that ...The Legacy of Fischer Black (a review)This wide-ranging, well-edited book provides a good taste of Black’s approach to quantitative finance through a thoughtful ...Trends in Quantitative Finance This introduction to recent developments in modeling equity returns provides a plain-English, formula-free review of ...Post-Earnings-Announcement Drift: The Role of Revenue SurprisesThe study reported here consisted of estimating earnings and sales (or revenue) surprises either with historical time-series data ...Why the Bubble Burst: U.S. Stock Market Performance since 1982 (a review)With the thoroughness of an able scholar, the author offers evidence that the flow-of-funds methodology provides a unique and ...Using Investor Relations to Maximize Equity Valuation (a review)This short, easy-to-read volume describes aspects of the investor relations function; comments about methods to attract different ...The Behavioral ConnectionThis article addresses the following key points: • According to some experts, a "very real" connection exists between ...Valuation Models and Global MarketsThe value of a company can be estimated several ways, including direct valuation and relative valuation. ...Understanding Drug PricingPharmaceutical companies are prone to making three big pricing mistakes: having an internal or inward focus, ...Big Pharma at the CrossroadsThe global pharmaceuticals industry is operating under challenging conditions that are likely to continue for ...Countries versus Industries in Europe: A Normative Portfolio ApproachThe unification of Europe has resulted in growing influence of industry selection over country selection in optimal portfolio ...Does Idiosyncratic Risk Really Matter?Previous research has demonstrated a positive relationship between stock volatility and future stock returns. In this paper, the ...Dynamic Linkages between the Greater China Economic Area Stock Markets—Mainland China, Hong Kong, and TaiwanThe trend towards integration of global stock markets reduces the benefits of portfolio diversification. However, stock market ...The P/B-ROE Valuation Model RevisitedThe price-to-book ratio–return on equity (P/B–ROE) approach to stock valuation is a two-stage model that was developed in 1984 by ...Returns from Active Management in International Equity Markets: Evidence from a Panel of UK Pension FundsPerformance of international equity pension funds from the United Kingdom over the 1991–97 period is decomposed into security ...Long-Term Returns on the Original S&P 500 CompaniesThe S&P 500 Index is continually updated, with approximately 20 companies added each year and an equal number dropped. In the ...Fault the Tax Code for Low Dividend PayoutsReducing the marginal tax rate on dividend income was not the optimal modification of the tax code. The U.S. corporate tax code ...International Evidence on the Payout Ratio, Earnings, Dividends, and Returns Recent evidence for the U.S. market has shown that, contrary to popular wisdom, the greater the proportion of earnings paid out ...Corporate Failure and Equity ValuationAn important problem for portfolio managers is how to adjust the valuation of equity for the risk that the company may fail. ...Chronic Bias in Earnings ForecastsWhatever the source or explanation of bias in forecasts of company earnings, if such bias persists, it is potentially ...The Active Management Premium in Small-Cap U.S. EquitiesFor the past 20 years, average small-cap U.S. equity managers have outperformed the Russell 2000 Index by over 500 bps per year. ...Extracting Inflation from Stock Returns to Test Purchasing Power ParityThe failure of empirical studies to support the relative purchasing power parity (PPP) may be caused by the use of the CPI to ...Investor Sentiment and Asset ValuationUsing survey data on investor sentiment, the authors provide evidence that sentiment affects asset valuation. Periods of high ...The Stock Market's Reaction to Unemployment News:Stock prices respond positively to news of rising unemployment during expansions but negatively during contractions. The authors ...What Explains the Stock Market's Reaction to Federal Reserve Policy?The authors examine the stock market's reaction to U.S. Federal Reserve Board rate change announcements and find evidence that ...What Stocks Appeal to Institutional Investors?The authors investigate institutional ownership of stocks among the following factors: value versus glamour; momentum; prudent ...Evidence on the Speed of Convergence to Market EfficiencyAlthough day-to-day returns indicate the lack of significant serial correlation, order imbalances can persist for several days. ...There Is a Risk–Return Trade-Off After AllThe authors examine the intertemporal risk–return trade-off by using a new procedure to estimate variance. Their mixed data ...Long-Term Global Market CorrelationsThe authors analyze the correlation structure of the global equity market over the last 150 years. They discover that the global ...An Alternative Approach to International Growth InvestingIn Search of Information Content:Tangible BenefitsThis article addresses the following key points: The presence of institutional investors appears to be important in offsetting ...The Investment Value of an Idea The value of an idea derives from its ability to solve our problems. It ends when a fully developed better idea arrives. No one ...Dividends and the Frozen Orange Juice Syndrome The bonanza of a 15 percent top-bracket federal income tax on dividends has had little impact on values in the stock market or ...Aristotle on Investment Decision Making In this age of inexpensive and abundant data, investors must remain mindful of the limitations of the data they are using for ...Value and Risk: Beyond Betas Risk can be both a threat to a company's financial health and an opportunity to get ahead of the competition. Most analysts, ...Bad Beta, Good BetaResearch on the performance of the capital asset pricing model (CAPM) has shown a failure to adequately describe the relationship ...Capital Investments and Stock ReturnsThe authors examine the relationship between the relative level of corporate capital investment and subsequent stock returns. ...Corporate Earnings and the Equity PremiumThe authors provide further analysis of the equity premium puzzle by presenting a continuous-time model in which dividends are a ...Information Content of Equity Analyst ReportsThe authors examine the impact of information from analyst reports on market abnormal returns from 1997 to 1999. They find that ...Sources of Return in Global InvestingThe authors present a new framework for analyzing international equity returns that considers unique industry and style factors. ...Stock Prices and Fundamentals:According to the Gordon growth model, the dramatic increase in equity prices relative to earnings and dividends in the late 1990s ...Valuing Routine Intangible AssetsThe author considers valuation techniques for “routine” intangible assets, or those that do not increase firm value but, rather, ...Reflections on the Efficient Market Hypothesis:The author compares the performance of actively managed mutual funds over 30-plus years with benchmarks and index funds. For ...Why Non-U.S. Investing is Essential, Not OptionalThe author examines international equity investing by focusing on performance, valuation, risk, and globalization. He concludes ...Value and Risk:Risk can be both a threat to a company's financial health and an opportunity to get ahead of the competition. Most analysts, when ...Abnormal Returns from the Common Stock Investments of the U.S. SenateGSE RisksStock Return and Interest Rate Risk at Fannie Mae and Freddie MacHedge Funds in Corporate ClothingThis article addresses the following key points: At the end of June 2004, the total amount for US-based derivatives for the top ...Aristotle on Investment Decision MakingIn this age of inexpensive and abundant data, investors must remain mindful of the limitations of the data they are using for ...Aristotle on Investment Decision MakingIn this age of inexpensive and abundant data, investors must remain mindful of the limitations of the ...Choosing the Right Valuation ApproachBefore beginning any analysis, the analyst should define the claim and level of value, the valuation date, ...An Analyst's Perspective on Financial ReportingAnalyzing financial statements is difficult because (1) the information is spread across three separate ...The Short Perspective in Today's MarketsWhen analyzing a company, examining the financials—the numbers—is clearly important. But it is not the only ...Combining Technical and Fundamental AnalysisThe efficient market hypothesis is flawed because investors do not have perfect information and they do not ...The Rise of Independent ResearchThis article addresses the following key points: Independent research revenue is expected to triple by 2008. With more research ...Good Corporate Governance Works:Inclusion in the California Public Employees' Retirement System's Focus List is positively related to company performance. This ...Do Security Analysts Exhibit Persistent Differences in Stock Picking Ability?The authors determine whether analysts who have demonstrated a superior or inferior ability in picking stocks continue to exhibit ...How Informed Are Actively Trading Institutional Investors?The authors present evidence that institutional investors who are the most frequent traders have information that allows them to ...Institutional Herding in the ADR MarketThe authors investigate the effect of herding by institutions in the market for American Depositary Receipts (ADRs). They find ...Low-Cap and Low-Rated CompaniesSmall-cap stocks have underperformed large-cap stocks since the 1980s in most developed stock markets around the world, reversing ...Predicting Returns with Financial RatiosThe author uses data from 1946 to 2000 to compare the ability of three regression models to predict aggregate stock market ...Stock Returns and the Business CycleThe author examines whether U.S. monthly index returns and economic factors have, in fact, varied as predicted. In doing so, he ...Traditional Beta, Downside Risk Beta, and Market Risk PremiumsThe author develops an asset-pricing model similar to the capital asset pricing model using conditional value at risk (CVAR) as ...Hedge Funds and the Technology BubbleThe efficient market hypothesis suggests that rational investors trade against irrational price increases to prevent price ...Rational ExuberanceThe author maintains that bubbles are a viable candidate for explaining the extreme volatility of asset prices. His review covers ...Does Stock Return Momentum Explain the “Smart Money” Effect?Stock Prices, Firm Size, and Changes in the Federal Funds Rate TargetWhy Has IPO Underpricing Changed over Time?The Investment Value of an IdeaThe value of an idea derives from its ability to solve our problems. It ends when a fully developed better idea arrives. No one ...The Economics of Short-Term Performance ObsessionIn theory, discounted cash flows (DCFs) set prices in well-functioning capital markets. In practice, investment managers attach ...Dividends and the Frozen Orange Juice SyndromeThe bonanza of a 15 percent top-bracket federal income tax on dividends has had little impact on values in the stock market or on ...Value and Risk: Beyond BetasRisk can be both a threat to a company’s financial health and an opportunity to get ahead of the competition. Most analysts, when ...Understanding MomentumThe extensive literature on price momentum effects is a potential source of confusion for portfolio managers because conflicting ...Fundamental IndexationA trillion-dollar industry is based on investing in or benchmarking to capitalization-weighted indexes, even though the finance ...Long–Short Strategies May Not Be Factor-NeutralLong–short strategies designed to reduce risk must be neutral to all factors in a multifactor model, not just ...Economic Sources of Gain in Stock RepurchasesThe authors use more than 5,000 open-market repurchases from 1980 to 1996 to evaluate three economic motives ...Firm Size and the Gains from AcquisitionsThe authors compare market reactions to acquisitions by large companies with reactions to those by small ...Disclosure Quality and the Excess Value of DiversificationThe authors find that increased disclosure reduces the diversification discount long recognized in ...Active versus Passive Strategies for EAFE and the S&P 500The authors determine whether active strategies can outperform passive strategies that use the S&P 500 ...Don't Worry about the Election The authors compare the effect of the U.S. president's political party, political gridlock (i.e., separate parties controlling ...Estimating the Market Risk PremiumThe historical average of excess market returns is quite likely to overstate the market risk premium after ...Evidence to Support the Four-Factor Pricing Model from the Canadian Stock MarketThe authors add a momentum component to the Fama–French three-factor pricing model. They test their ...Mean Reversion in Earnings and the Use of E/P Multiples in Corporate ValuationThe impact on a company's earnings-to-price ratio (E/P) resulting from a significant change in earnings can ...New Lists: Fundamentals and Survival RatesNew stock listings by companies publicly raising equity for the first time increased dramatically in the ...Limited Stock Market Participation and Asset Prices in a Dynamic EconomyTo explain the equity premium puzzle, the author presents a consumption-based asset-pricing model with three ...Asset Allocation in Stable and Unstable TimesPortfolio optimization is sensitive to episodes of financial distress, which cause temporary increases in two ...Inflation Illusion and Stock PricesThe authors examine the Fed model's ability to determine stock yields and conclude that the model is ...Style Management in Equity Country AllocationStrategies that entailed country selection based on relative strength (momentum) posted significant market ...All Things Considered, Taxes Drive the January EffectThe Performance of Socially Responsible Investments: Investment Funds and IndicesFinancial Dynamics: A System for Valuing Technology Companies (a review)A close reading of this book should enable the diligent analyst to view the valuing of technology companies from a fresh ...Using the WACC to Value Real OptionsUse of the weighted-average cost of capital (WACC) in real-option valuation is an alternative to using risk-neutral real-option ...Style Management in Equity Country AllocationStrategies that entailed country selection based on relative strength (momentum) posted significant market risk–adjusted returns ...What Determines Chinese Stock Returns?This study applied the three-factor model to A-shares in the Chinese equity market, one of the fastest growing markets ever. The ...Security Analyst Independence Many investors perceive, based primarily on anecdotal evidence, that analysts do not act independently. What the authors of this ...Employee Stock Options and Equity Valuation Increasingly, companies are turning to employee stock options to meet the challenge of aligning the interests of employees and ...Earnings Quality Understanding the quality of earnings is an essential part of processing and interpreting information. A high-quality earnings ...Valuing Companies by Cash Flow Discounting: Ten Methods and Nine TheoriesThe author analyzes 10 different valuation methodologies and finds that they yield similar results. The author also examines nine ...Option-Implied Risk-Neutral Distributions and Risk Aversion Analysts are accustomed to using prices for the information they contain. A stock price, for example, can be thought of as an ...How to Value a Seasonal Company Discounting Cash FlowsThe author posits that the correct way to value seasonal companies is by discounting cash flows on a monthly, rather than annual, ...Strategy Benchmarks - From the Investment Manager’s PerspectiveDavid Kuenzi explains the inadequacy of using readily available, published indices that do not accurately reflect the investment ...Three Residual Income Valuation Methods and Discounted Cash Flow ValuationThe author demonstrates that three residual income measures, including Economic Profit, Economic Value Added and Cash Value ...Valuation of Brands and Intellectual CapitalThe author considers several methodologies used for valuing brands and intellectual capital, including those of Interbrand, ...Are Calculated Betas Worth for Anything?The author calculated the betas of 3,813 companies using 60 monthly returns each day over a two-month period and found the ...Financial Astrology: Mapping the Presidential Election Cycle in U.S. Stock Markets The authors examined nearly four decades of stock returns and found that U.S. stock prices closely followed the four-year ...Price-to-Earnings Ratios: Growth and Discount RatesWe decomposed the market-level P/E into a no-growth component, which depends only on future discount rates, and a growth ...Equity Premiums around the WorldThe authors update the long-term realized equity risk premium for 19 different countries for 1900–2010. For the 19-country World ...Rethinking the Equity Risk Premium: An Overview and Some New Ideas In 2001 a small group of academics and practitioners met to discuss the equity risk premium (ERP). Ten years later, in 2011, a ...Time Variation in the Equity Risk PremiumWhat is considered to be the best source of information about the future equity risk premium has shifted from historical average ...The Equity Premium Puzzle RevisitedSince the 1985 publication of the original article on the equity premium puzzle, much research and controversy has surrounded the ...Equity Risk Premium MythsSeveral myths about the equity risk premium have existed for quite a while, so the time is ripe to separate myth from fact. Once ...Will Bonds Outperform Stocks over the Long Run? Not LikelyBonds have outperformed stocks over the past decade and almost matched the returns of stocks in the past 40 years, but analysis ...A Supply Model of the Equity PremiumIn 2002, Grinold and Kroner proposed a model of the equity risk premium (ERP) that linked equity returns to GDP growth. In this ...The Equity Risk Premium The equity risk premium is a long-run equilibrium concept that estimates the future excess return of the stock market over and ...Long-Term Stock Returns Unshaken by Bear MarketsStock markets have suffered through two major bear markets since 2001, and the returns for stocks, bonds, and Treasuries over the ...Reflections After the 2011 Equity Risk Premium ColloquiumDisagreement about long-term predictability of the equity risk premium continued in the 2011 forum. It is admittedly hard to be ...The Presidential Puzzle: Political Cycles and the Stock MarketThe authors find that returns in the stock market are higher under Democratic than Republican presidencies. Further, the ...The Effect of Analyst Coverage on the Informativeness of Income SmoothingCompanies that have an analyst following seem to practice income smoothing, which may convey private ...Factions and Finance in China: Elite Conflict and InflationThis book on the Chinese banking sector is one of the first to develop a framework analyzing the impact of elite politics on both ...The Stock Selection and Performance of Buy-Side AnalystsThe authors examined the selection and performance of stocks recommended by analysts at a large investment firm relative to those ...Investment Opportunities in African Markets: Potential WinnersAfrica’s natural resources and favorable demographics will lead to sustainable economic growth and prosperity. Furthermore, its ...Investment Opportunities in African Markets: Potential WinnersAfrica’s natural resources and favorable demographics will lead to sustainable economic growth and prosperity. ...Keynes the Stock Market InvestorThe authors examine the investment philosophy, strategies, and trading record of economist John Maynard Keynes in the context of ...Understanding Expected ReturnsInvestors tend to think of expected returns as a function of asset class risk, but this thinking may have led them to ...Value Investing: Investing for Grown Ups?The author describes three distinct strands of value investing. The first, passive value investing, can be traced to Benjamin ...Information Leakage Prior to Company Issued GuidanceThe authors find that information leakages prior to public earnings guidance issued by company management exist even after ...Are Stocks Really Less Volatile in the Long Run?Annualized volatility of stock returns is widely thought to be lower over long horizons than over short horizons, due to mean ...Under/Over-Valuation of the Stock Market and Cyclically Adjusted EarningsThe ratio between current earnings per share and share price (the EP ratio) is widely considered to be an effective gauge of ...An International Analysis of Earnings, Stock Prices and Bond YieldsThe authors assess the relationship between stock index prices, earnings and long-term government bonds in thirteen countries and ...A Network Value Theory of a Market, and PuzzlesBy considering the stock market as a network that impounds liquidity and information production, the authors were able to study ...Surveying Global EconomiesIn several major global economies, excessive levels of private sector debt remain a problem while some asset prices (e.g., U.S. ...What is the Risk-Free Rate? A Search for the Basic Building BlockThis article reveals common errors and provides suggestions on solutions when no government bond rate is available, when there is ...A New “Risky” World Order: Unstable Risk Premiums Implications for PracticeThis article looks at how risk premiums affect investing, valuation, corporate finance decisions, and potential shifts in ...Into the Abyss: What if Nothing Is Risk Free?A key assumption in corporate finance and investment analysis is the existence of a risk-free investment, but during the ...CFA Institute 2010 European Investment Conference BlogRead summaries of 14 key sessions from the recently concluded Third Annual CFA Institute European Investment Conference in ...Online Data - Robert ShillerThis website comprises a long history of data on components of equity returns, interest rates, inflation and housing prices. Venture Capital 101In this article, the National Venture Capital Association (NVCA) provides an introduction to the venture capital industry in the ...Benjamin Graham: Building a Profession (Take 15 Series Transcript)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Momentum – A Contrarian Case for Following the HerdIn this white paper, the author examines the historical performance of momentum strategies in equities over an 80-year time ...Rethinking the Equity Risk PremiumMany investors regard the past decade as an unusual one for market returns. One of the key features of this turbulent period is ...ESG Information and ValuationLouise O’Halloran shares her views on increasing recognition and availability of information on environmental, social, and ...Demographic Changes, Financial Markets, and the Economy In this webinar, the authors discuss the link between demographic transitions and both GDP growth and capital market returns. ...Equity Investing: How to See Beyond the UncertaintyJames Kieffer, portfolio manager with Artisan Partners, will address the long-term prospects for equities versus other asset ...Exchange-Traded Funds: Investor Challenges and OpportunitiesAnthony Chan discusses China research insights from an exchange-traded fund (ETF) perspective, finding liquidity in the search ...Africa and Frontier MarketsRuna Alam discusses the growing role of frontier markets in the global economy and how investors can assess the challenges and ...Resolving Implementation Issues Facing Emerging Market InvestorsDonald Lindsey, CFA, discusses different risks in emerging market portfolios, including liquidity, currency, execution, leverage, ...The Next Major Trend in Emerging EconomiesArjun Divecha reviews the recent stages of economic development in emerging economies and discusses how economics and ...Managing Emerging and Frontier Market Small-Cap Portfolios: Opportunities and RisksNick Padgett, CFA, offers his take on information availability and mispricing in the areas of security analysis, valuation, and ...Evolving Emerging Market StrategiesJohn Calamos, Sr., chief executive officer of Calamos Investments, will address evolving trends in emerging markets as well as ...Why Diversification is Alive and Well: A Multi-factor Investment ApproachWith global markets marked by volatility and uncertainty, proper asset allocation and diversification will be critical to ...Positioning Portfolios for the Long Term Richard Bernstein examines global markets on an investor level, detailing the differences between investor expectations and ...The Most Important Thing: The Human Side of InvestingHoward Marks, CFA, discusses a right-brain approach to investing and how risk control is the hallmark of an investment ...Think Differently: Off-the-Grid Economic IndicatorsNicholas J. Colas discusses why traditional economic indicators are inadequate tools for valuation and how investors can adjust ...Conversation with a Veteran Value InvestorJean-Marie Eveillard explains the concepts of value investing and how they have evolved over time. Valuing Young Growth CompaniesProfessor Aswath Damodaran explains that good investors of all stripes care about value, and while traditional value investors ...The Case for Investing in Africa (Take 15 Series) Clifford D. Mpare, CFA, explains why Africa is an attractive market for investors. The Take 15 Series is a series of short ...Investment Opportunities in Africa: Potential Winners Clifford D. Mpare, CFA, discusses which African nations have the most improved macro environments and how these factors can ...ROE: The Wrong Performance Measure for Banks (Take 15 Series)Robert Jenkins, FSIP, cites the flaws in the traditional Return on Equity (ROE) measure in measuring bank financial performance ...Dark Pools and Market Transparency (Take 15 Series)Frédéric Romand discusses the role of dark pools and their relative merits and drawbacks in the context of equity market ...A Survey of Alternative Equity Index StrategiesJoin Jason Hsu for an evaluation of popular alternative equity index strategies offered to investors. He explains how the ...Equity Market Valuation: A CFA Institute Investment Series Lecture Valuation is not just a matter of finding a number; rather, it is trying to bracket a "range of reasonableness." This ...Time Value of Money: The Essence of Securities Valuation In today’s world of complex structured securities, valuing these securities can seem a daunting task. However, if one stands ...Managing Volatility of Emerging Markets Bud Haslett, FRM, CFA, and Matthew T. Moran present an overview of implied and historic volatilities for key emerging markets, ...Rogers of Ariel Investments Is Bullish on Equities (Take 15 Series) John W. Rogers, Jr. discusses his 30 years of investment experience and compares today’s markets with those of the early ...Superior Risk Management through Value Investing (Take 15 Series) Charles K. Bobrinskoy describes how Ariel Investments puts Buffett value investing principles to work. The Take 15 Series is a ...Author Insights: Larry Speidell, CFA, on Frontier Markets Author Larry Speidell, CFA, discusses his recent monograph, Frontier Market Equity Investing: Finding the Winners of the Future, ...High-Frequency Trading, Flow Toxicity, and the Flash Crash (Take 15 Series) At the Asian Finance Association Conference in Macao SAR, China, Dr. Maureen O’Hara, an expert in market microstructure and ...Does the Stock Market Distort Investment Incentives?Do agency problems (from the separation of ownership and control) cause public companies to invest suboptimally? In a ...Best Practices for Equity Research AnalystsJames J. Valentine, CFA, presents some insights from his recently published book, Best Practices for Equity Research Analysts. He ...How Are Asian Financial Institutions Impacted by Changing Accounting and Regulatory Regimes? (Take 15 Series) Yin Toa Lee, CFA, reviews the new global regulatory initiatives and changing accounting standards and their business impacts on ...Asian Financial Institutions under the New Accounting RegimeYin Toa Lee, CFA, provides an overview of the various recent accounting standards changes from the FASB and IASB, as well as the ...Asset Price BubblesWerner DeBondt discusses the elements of bubble psychology and behavioral asset pricing, focusing on euphoria and hysteria ...Adding Value through Values: The Evolution of Sustainable and Responsible Investing (SRI)Julie McDowell discusses sustainable and responsible investing (SRI) and how it fits into investment strategies, differences in ...Wall Street Revalued (Take 15 Series) Andrew Smithers discusses why the U.S. equity market is currently overvalued and argues that central banks should be encouraging ...Predatory Trading, Crowded Exits, and Other Unusual Risks in Short SellingJames B. Clunie, CFA, ASIP, examines the vulnerabilities of short sellers that many investors and firms fail to recognize ...Investing in Private EquityTim Jenkinson offers a recap of private equity fundraising since the 2007–2008 peak and examines valuation levels, performance, ...Managing Unquantifiable Portfolio Risks: Politics, Policy, and GeopoliticsPippa Malmgren discusses the importance of understanding the relationship between inflation and recent geopolitical developments. ...To Time or Not to Time? How Best to Structure an Emerging Markets Investment ProgramGeorge R. Hoguet, CFA, analyzes whether investors should allocate strategically or tactically to emerging markets and whether ...Portfolio Management and Geopolitical RiskJames G. Rickards discusses the principal geopolitical risks affecting investors today and how to integrate these risks with ...Geopolitical Risks and Trends (Take 15 Series)Kevin Kajiwara discusses the global investment implications of current geopolitical trends and risks. The Take 15 Series is a ...The 3-D Hurricane: Finding Opportunities in Challenging Markets Robert Arnott describes a daunting capital market environment that will struggle to perform in the face of three challenges: ...Reflections on Decision Making and CounterintuitionMichael J. Mauboussin discusses the role of technical competence, “counterintuition,” and the application of multiple mental ...Valuation Inferno: Dante Meets DCF – Avoiding Common Mistakes in Valuation AnalysisAswath Damodaran discusses input traps and inconsistencies of discounted cash flow (DCF) valuation and describes the 10 most ...Criticisms of Traditional DCF Analysis (Take 15 Series) Professor Aswath Damodaran discusses current approaches to valuation, particularly discounted cash flow valuation. He also ...The Impact of a Family Business on Managing Wealth This is an archived recording of a live event that took place on 16 December 2010. Panelists discuss which analytical approach ...Investing in Turbulent TimesJavier Estrada examines historical equity returns, both in absolute terms and relative to bonds, providing context for the poor ...NYSSA Water Utilities Conference WebcastsIncreases in global water demand, combined with escalating supply challenges, will continue to drive the need for improved water ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 1 - Geroge FulopAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 6 - Nicholas LandekicAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 7 - Kevin QuinlanAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 8 - Jack TalleyAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 9 - Leslie BrowneAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 4 - Craig A. DionneAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 5 - Craig DeesAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 2 - James ManusoAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...NYSSA Biotech and Specialty Pharmaceuticals Conference: Part 3 - Spiro RombotisAfter a strong recovery in 2009, investment performance in the biotech industry is mixed these days, with small-cap companies ...Relative Valuation: Improving the Analysis and Use of MultiplesAswath Damodaran presents an approach for analyzing and using multiples (e.g., price-to-earnings and enterprise-value-to-EBITDA ...Fundamentals versus MomentumFred Speece, Jr., CFA, explores the underlying motivations of investors’ “herding” instincts, as well as the rewards offered to ...The ABCs (and Ds) of the Search for Value Donald Coxe discusses endogenous and economic risks and presents his ABCs of equity investing today: aurum (gold), bonds, and ...Case Studies in Valuation: Health Care Industry Analysis and More Kenneth H. Shubin Stein, CFA, explores the health care sector, including applications of valuation approaches and the effects on ...Value Investing Perspectives (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Conversation with a Veteran Value Investor Charles T. Akre, Jr., and Fred H. Speece, Jr., CFA, discuss reliable valuation approaches and explain how to determine earnings ...Opportunities and Challenges in Eastern European Markets (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Russia: Where It Came From, Where It Is Now, and Where It's GoingAt a CFA Society of Cleveland event, Timothy Enneking reviews Russia’s current economic situation and its post-crisis position in ...Career Chat: Trading Desk Research Wall Street trading desks, the traditional habitat of the desk analyst, are in a state of flux as the largest firms scramble to ...China Capital Markets Development and Implications for Wealth OwnersAaron Low, CFA, discusses recent developments and outlook for the A-shares, B-shares, H-shares, REIT, and related markets, as ...NYSSA Construction and Materials Conference: Part 1 - Jack Kasprzak The recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 2 - Donald JamesThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 3 - Barclay SimpsonThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 4- Louis GriesThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...NYSSA Construction and Materials Conference: Part 5 - Daryl SandsThe recovery in the construction sector that began at the end of last year has stalled in recent months, with materials ...Mongolia Investment Conference: Part 3 - Douglas McGayMongolia is expected to become one of the world’s fastest growing economies over the next decade thanks to its immense resources ...Will New Law Require U.S. Banks to Bolster Their Capital?Standard & Poor's analysts discuss the impact of the new Dodd-Frank Law on bank capital standards and discuss how Standard ...Not Just a Lot of Hot Air: Environmental Mandates, Renewable Energy, and the Regulated Utilities IndustryStandard and Poor's analysts discuss the outlook for environmental regulation including congressional and Obama administration ...Low Volatility Equity Portfolios (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Benjamin Graham: Building a Profession (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...The Role of Frontier Equity Markets in Portfolio Management (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Exploring the Frontier Emerging Equity MarketsIn this webcast, Cliff Quisenberry, CFA, defines frontier emerging markets and discusses the risks, rewards, and unique ...China: Separating Myth from RealityIn this podcast, Michael Kurtz discusses the structural bear case for Chinese equities, the renminbi and positioning a portfolio ...The Power of Negative Thinking: A Short Seller's Perspective In this webcast, James S. Chanos discusses the following: Understanding what makes a short seller’s approach to research ...Uncertainty's Reward: Issues and Opportunities in Healthcare Investing In this webcast, John L. Sullivan, CFA, discusses how investment opportunities within the healthcare and life sciences industry ...Identifying Accounting Shenanigans (Take 15 Series)In this episode, Howard Schilit reviews a few cases of accounting fraud and discusses techniques on how to identify accounting ...Give Us (Earnings) GuidanceThe Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...The S&P 500: More than 500 StocksIn this webcast, David M. Blitzer discusses the S&P 500, compares index protection strategies, and describes how the S&P ...Global Currency Hedging: What Role Should Foreign Currency Play in a Diversified Investment Portfolio?John Y. Campbell’s presentation analyzes seven major currencies and why only some provide an effective hedge against equity risk, ...Economic Growth and Equity InvestingIn this seminar, recorded on 21 April 2010, Bradford Cornell offers insights into likely future returns to equity investments. ...Practical Applications of Behavioral Finance for Institutional Investors In this podcast, Christopher Blum, CFA, discusses how to incorporate behavioral finance principles into equity investing, and ...The Financial Crisis: Impact on Theory and PracticeAt a Toronto CFA Society lunch event on 8 April 2010, Ralph Layman, CFA, president and chief investment officer of International ...Fundamental Analysis in the Middle East and Emerging Africa: Challenges and OpportunitiesIn this podcast, David P. Sanders, CFA, discusses the following: Overview of the equity investment opportunity set in the ...Trade Management (Take 15 Series)In a brief interview, Theodore R. Aronson, CFA, discusses insights for trade management; how trading has become more ...Private Equity after the Credit CrisisThe Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Financial Interdependence in the World's Post-Crisis Capital Markets The Global Interdependence Center (GIC) partnered with the CFA Society of Philadelphia, the Federal Reserve Bank of ...Stimulus, Liquidity, and Bubbles: Is China Leading the Global Economic Recovery? (Take 15 Series)In this episode, Jie Gan evaluates China’s role in the global economy. Equity Market Inefficiency (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Calculating Equity Risk PremiumsIn this session, Professor Aswath Damodaran discusses how to compute an equity risk premium using formulas derived from bond ...Rethinking BetaIn this session, Professor Aswath Damodaran discusses techniques for calculating company betas to improve valuation techniques. ...LiquidityIn this session, Professor Aswath Damodaran discusses how to think about and factor in company-specific liquidity in valuation ...GlobalizationIn this session, Professor Aswath Damodaran discusses how to account for country-specific risk when valuing equities. Please ...Reflections on Selecting Stocks from a Value MavenIn this podcast, Amit B. Wadhwaney discusses the following: Defining value investing Sector-specific due diligence ...Back to Basics: A Stock Picker's MarketIn this podcast, Jason DeSena Trennert discusses the following: Possible outcomes and unintended consequences of the ...Equity Investing for 2010 (Take 15 Series)The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Equity Investing for 2010 ALSIn this episode, Steven M. Galbraith discusses the following: Equity values in the current economic environment ...The European Economy in the Global Financial CrisisIn this webcast, Martin Wolf gives an overview of the European economy in the global crisis. Download podcast version Generating Alpha in MENAIn this webcast, Khaled Abdel Majeed discusses the following: Characteristics of the MENA Region Capturing ...The End of the Crunch? The Credit Cycle and Asset Class ReturnsIn this webcast, Christian Gattiker-Ericsson, CFA, discusses the following: Where we are in the deleveraging process, and ...India: Opportunities and ChallengesIn this webcast, Arshad R. Zakaria discusses the following: Macro- and microeconomic factors to consider when investing in ...Global Equity Investing (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ..."The Future of Ireland Inc.?" The Financial and Economic Questions Currently Facing Ireland“The Future of Ireland Inc.?” was a question-and-answer panel discussion hosted by CFA Ireland on 10 June 2009. The panel ...Why Fundamental Indexation Might—or Might Not—Work In this seminar, Paul Kaplan, CFA, addressed how fundamental indexation challenges traditional market-cap indexing by suggesting ...Identifying Market Inflection PointsIn this webcast, Russell Napier, ASIP, discusses the following: Analysis of four historical bear markets, and strategic and ...An Overview of the Housing / Credit Crisis: Is There Value Amidst the Rubble?In this webcast, Whitney Tilson discusses the following: Causes and consequences of the "great U.S. housing ...Global Systemic Risk: What We've Learned and the Way Forward In this webcast, Nouriel Roubini discusses the following: Outlook for the U.S. and global economy Should we worry ...Sovereign Wealth Funds: How Energy Is Contributing to a Global Reallocation of Wealth In this podcast, Rachel Ziemba discusses the following: Are sovereign wealth funds here to stay, and will their influence ...Unconventional Resources: Canada's Oil SandsIn this podcast, Rick George discusses the following: Opportunities presented by an unconventional petroleum resource basic ...Alternative Energy Sources In this webcast, Pearce W. Hammond, Jr., CFA, discusses the following: How will alternative energy sources grow in ...The Oil Service Sector: The New Big Oil? In this webcast, Byron K. Pope, CFA, discusses the following: What role can the service sector play in a world where ...War Stories from the Past Year: A Survivor's Guide In this podcast, Alan J. Brown, FSIP, discuss the following: Determining a market value when there is no market ...GIC Food and Water Panel Discussion In this podcast, from the GIC 2009 "Food and Water—Basic Challenges to International Stability" conference, Jim ...Emerging and Frontier Markets: The Middle East and North Africa Region In this webcast, presented in partnership with the Chartered Alternative Investment Analyst (CAIA) Association, Khaled Abdel ...Global Financial Crisis Roundtable In this webcast, Jason Zweig moderates a panel of experts including Theodore R. Aronson, CFA, Abby Joseph Cohen, CFA, Martin S. ...Expected Returns for the Next 20 YearsIn this webcast, James P. O'Shaughnessy discusses the following: Systematic, quantitative approaches as superior ...White Swans, Revulsion, and ValueIn this webcast, James Montier discusses the following: The current crisis can be called a predictable surprise, not a ...The Myth of DiversificationIn this webcast, Sébastien Page, CFA, discusses the following: Does diversification “lend you an umbrella when the sun is ...Dante Meets DCF: The 10 Biggest "Sins" in DCF Valuation (Part 1)In this webcast, Aswath Damodaran discusses the following: Input traps and inconsistencies of discounted cash flow (DCF) ...Dante Meets DCF: The 10 Biggest "Sins" in DCF Valuation (Part 2)In this webcast, Aswath Damodaran discusses the following: Input traps and inconsistencies of discounted cash flow (DCF) ...Bear Market Active InvestingIn this webcast, Peter H. Puccetti, CFA, discusses the following: The impact of the credit crisis on small cap stock ...Conversation with a Money Master 2008In this podcast, hear a conversation with V. Prem Watsa, CFA, a renowned value investor who will discuss his investment approach, ...The EVA Framework and the Current Economy (Take 15 Series) The Take 15 Series is a series of short interviews with leading practitioners on timely topics focused on the investment ...Rethinking Tax-Efficient Asset Allocation for the High-Net-Worth Investor In this podcast, Niall J. Gannon discusses the following: Does the notion that “stocks outperform bonds over the long ...Investing in Private EquityIn this podcast, Mark D. Wiseman discusses the following: Prospective correlations of private equity investments with ...Opportunities and Risks in Exchange-Traded Funds (ETFs)In this webcast, Mark Armbruster, CFA, discusses the following: Characteristcs of ETFs and their popularity among ...What Happened to the Quants in August 2007? In this webcast, Andrew W. Lo discusses the following: Events that led to the unprecedented losses experienced by ...Conversation with a Money Master: Free Cash Flow and Quality of EarningsIn this webcast, Robert A. Olstein and Fred H. Speece, Jr., CFA, discuss the following: Valuation and inferential ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Leverage and Control: Implications for Valuation and Portfolio Management—Part IIIIn this webcast, Aswath Damodaran discusses the following: Leverage and control are twin impulses that drive leveraged ...Index Changes and Losses to Investors: S&P 500 and Russell 2000 Index FundsWatch a free webcast presentation by Vijay Singal, CFA, on his July/August 2006 FAJ article “Index Changes and Losses to ...The Relevance of Socially Responsible Investing to Research Analysts and Financial MarketsIn this webcast, Julie Hudson, CFA, discusses: Similarities and differences in implementing socially responsible investing ...Earnings Quality Analysis and Equity ValuationIn this webcast presentation, Richard G. Sloan discusses: Evidence on the success of earnings quality analysis in ...Expectations Investing — Reading Stock Prices for Better Returns In this webcast presentation, Michael J. Mauboussin discusses: Finding a stock selection process that combines the ...Macro Economy: Fiscal and Monetary EnvironmentDaniel Clifton, Donald Rissmiller, and Jason Trennert from Strategas Research Partners share their views on the current economic ...Markets Are Global But Politics Are LocalSteve Galbraith of Maverick Capital shares his views on the current investment environment, noting that emerging markets ...Introduction to Residual Income Equity Valuation Course In this course, you will learn the concept of residual income and how it is applied in equity valuation. You will also learn the ...Certificate in Quantitative Finance - OnlineThe Certificate in Quantitative Finance (CQF) is a six-month part-time course for individuals working in, or intending to move ... Conversation on Twitter Loading ... Most Viewed Korea Investment Conference Rethinking the Equity Risk Premium CFA Institute / Harvard Business School: Investment Management Workshop Top Rated Investment Issues in Emerging Markets: A Review Frontier Market Equity Investing: Finding the Winners of the Future Portfolio Management and Geopolitical Risk Continuing Education Progress CFA Members, log in to record credits towards your continuing education. Annual recommended minimums:20 CE, including 2 SER. Manage Your CE Credits CeDiarySummary Looking for Something Specific? Search our library for more on equity investments Subscribe to equity investments content Access our CFA Institute content specialists