I just found out that Harvey Korman passed away on Thursday. He was one of the giants of comedy in the 60s and 70s. I still remember many of his skits from the old Carol Burnett show. In particular, I loved how Korman and Tim Conway would play off each other. Here's one of my favorite pieces where Conway plays a novice dentist and ends up injecting himself in the hand and leg with Novocaine. Korman tries his best to play it straight, but eventually can's help himself and starts cracking up.
Rest in peace, Mr. Korman - you made many of us laugh so hard we cried.
"I'm so glad we had this time together
Just to have a laugh and sing a song
Seems we just got started and before you know it
Comes the time we have to say, 'So long"
Another Good Investment Banking Blog
The other day, while looking for ways to avoid studying for the CFA exam, I came across another pretty good blog on Investment Banking. It's titled "The Prince of Wall Street". Here's the Prince himself describing his blog:
to avoid sDescribe Prince of Wall Street's
Mention some of his linkslinks
...Prince of Wall Street is a regularly updated finance blog featuring original finance news, gossip, trades, and commentary. The commentary predominately focuses on M&A, private equity, hedge funds, and investment banking.Now some basic personal information about The Prince. He is a senior at a prestigious college awaiting the start of his first full-time job as an investment banking analyst at a bulge bracket bank. He did three summer analyst stints at a prestigious bulge-bracket investment bank and then signed on to work full-time in the Financial Sponsors Group. He worked in prime brokerage sales for two summers. It is fitting that The Prince would study Philosophy and Economics as an undergraduate. The Prince also spent a term at University College in Oxford (god save the queen, and The Prince).
This blog was started when The Prince realized he spent way too much time reading finance blogs and newspapers. He hopes to also share some of the humor that goes along with working in banking and give some perspective to prospective investment bankers on what life is really like as an analyst. Even if his readers decide his commentary and analysis is wrong, he hopes they at least find it thought-provoking. That is all my loyal subjects.
He's got a nice touch - he writes mostly in the third-person, has a good sense of humor, and uses a lot of references to Machiavelli (hence the title). My limited reading gives me a sense that while the blog covers a pretty good range of IB-related topics, it would be particularly interesting to students (both grad and undergrad) hoping to break into the IB field. So, I'll be adding it to my blogroll.
Check out the blog here.
Enough bloggery - back to CFA review.
to avoid sDescribe Prince of Wall Street's
Mention some of his linkslinks
Finance Professors Accused of Insider Trading
Here's another installment of "Finance Professors Behaving Badly":
John Marshall (retired finance professor at St. Johns University) and Alan Tucker (currently on faculty at Pace University) were recently accused by the Securities and Exchange Commission in March of passing along and trading on inside information about the takeover of The International Securities Exchange by Eurex. According to the S.E.C.'s allegations, Tucker, made more than $1 million trading on the tips he received from Marshall in 2007.
Read the whole thing here.
What's surprising is not that this happened, but that it doesn't happen even more often. Although the inside info didn't come from either of their finance classes (it came as a result of Marshall sitting on the board of a takeover candidate), finance professors (and particularly those in schools in the NYC area) get a lot of info.
Either we're smart (or ethical) enough to trade on that information, or smart enough not to get caught.
HT: Financeprofessor.com
John Marshall (retired finance professor at St. Johns University) and Alan Tucker (currently on faculty at Pace University) were recently accused by the Securities and Exchange Commission in March of passing along and trading on inside information about the takeover of The International Securities Exchange by Eurex. According to the S.E.C.'s allegations, Tucker, made more than $1 million trading on the tips he received from Marshall in 2007.
Read the whole thing here.
What's surprising is not that this happened, but that it doesn't happen even more often. Although the inside info didn't come from either of their finance classes (it came as a result of Marshall sitting on the board of a takeover candidate), finance professors (and particularly those in schools in the NYC area) get a lot of info.
Either we're smart (or ethical) enough to trade on that information, or smart enough not to get caught.
HT: Financeprofessor.com
Identifying Overvalued Equity
here's an interesting paper by Daniel Beneish of Indiana U. and Craig Nichols of Cornell titled "Identifying Overvalued Equity."
Here's the abstract:
It's an interesting paper, because it uses publicly available information to identify firms with high probabilities of negative returns. While it's probably not that applicable to individual investors, I can see their approach being of use to short-sellers (or those running long-short funds).
Here's the abstract:
RTWT here.Jensen (2005) argues that overvaluation changes the behavior of managers in ways that increase agency costs, but suggests that overvaluation is difficult to identify. We show that observable characteristics of changes in managers' accounting, operating, investing and financing decisions can be used to predict two likely consequences of overvalued equity: future stock price declines and overstatement of accounting earnings. In particular, we show that an overvaluation score (O-Score) that combines proxies for earnings overstatement, prior merger activity, excessive stock issuance, and the manipulation of real operating activities identifies firms with one-year-ahead abnormal price declines averaging -27%. We also estimate a model that integrates these various attributes to predict accounting restatements associated with fraud. In light of the costs associated with overvalued equity, the findings that firm characteristics can be used to identify overvalued equity should interest researchers who study overvaluation and professionals who oversee management on behalf of investors.
It's an interesting paper, because it uses publicly available information to identify firms with high probabilities of negative returns. While it's probably not that applicable to individual investors, I can see their approach being of use to short-sellers (or those running long-short funds).
Some Quick Tips For Summer Internships (Investment Banking and Otherwise)
Mergers and Inquisitions is rapidly becoming one of my favorite blogs - it's got a lot of good advice for those trying to get into the Investment Banking field. In his latest piece, the Inquisitor (nice name, BTW) puts up some helpful tips for those on a summer IB Internship. With minor modification, much of the advice holds up pretty well for almost any internship, no matter what field. Here's my take on the "important" stuff, with a few more thrown in to boot:
- Don't expect to work on a high-profile things. There's big money involved and high stakes, so they're not going to put it in your hands. So don't ask to do an LBO model right away. Expect to do a lot of grunt work - in any event, if you get a job offer, you'll be doing a lot of this anyway.
- Don't screw up. Ask questions if you're not sure. But don't ask the higher-ups. That's what (1) your peers, and (2) your "Analyst Master" are for. Never go higher up the food chain (like a Managing Director). Just. Don't.
- On a related note, Always check your work - multiple times. Get a reputation for doing sloppy work and you won't get an offer.
- Don't bad-mouth the competition. Word gets around, and there's a lot of shop-hopping. The person you bad-mouth the competition to this month might end up there next month.
- Even if you are working long hours (and you will be), stay cheerful and upbeat. Even if they know it's fake, it still scores points.
- Don't try to suck up to anyone above your analyst.
- When in doubt, keep your mouth shut, and don't brag. Chances are, the company folks around you will know far more than you. If they do, you'll get exposed as a poser or a jerk. If they don't, they won't appreciate your "superior" knowledge. So keep your yap shut - you almost never get in trouble for keeping quiet.
Great Reading List Of Children's Books
The Unknown Kids are both voracious readers. Not only that, but they know what "voracious" means, and how the word is connected to the words "carnivore", "herbivore", and "omnivore". And that's pretty good for a first grader and a third grader (hey, I have to spend at least a little time bragging on the Unknown Progeny).
So, if you have your own young bibliovore in the house, here's a great list of children's books from Theresa Fagan. She also writes:
So, if you have your own young bibliovore in the house, here's a great list of children's books from Theresa Fagan. She also writes:
The most serious battle going on in this country is over the souls of our children. It is impossible to exaggerate the power of the image to form or deform the way they think. It is crucial to arm them with heroes that make virtue attractive. This will entail exercising your God-given authority, but that’s what it’s for.For starters, get the TVs and computers out of their bedrooms, and drastically curtail their use. Cut the plugs if you have to. Then, stock the house with good books.
When they’re bored, they will read.
A lady after my own heart.
HT: Craig Newmark, who finds a lot of stuff I can steal.
Rube Goldberg Videos
Here's a video with some pretty elaborate setups. They seems like just the kind of thing I'd have really gotten into when I was a kid.
HT: The Volokh Conspiracy
HT: The Volokh Conspiracy
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