A New Excuse: My Prescription Ran Out

The Telegraph (UK) gives us this article on the possibility that we might have "memory pills" (medicines that enhance our ability to learn and remember things more easily:

The medicine has been designed originally to help treat Alzheimer's disease, but could be adapted and licensed for sale in a weaker form within the next few years.

One brand of memory-enhancing pill is being developed by the multinational company AstraZeneca in collaboration with Targacept, an American company, while Epix Pharmaceuticals, also from the US, is developing another.

Both have "cognitive-enhancing effects" which are aimed at treating patients with age-related memory loss.

Read the whole thing here

I expect that if the pills become available in the U.K., they'll make their way her into a black market long before they become legally available. My students have told me that there's a growing use of Adderal and Ritalin among their fellow students when studying for exams.

I can see it now - a student explaining their poor performance on an exam because their prescription ran out.

Oh, the humanity.

Good Bank, Bad Bank By Dr Seuss

Like many kids, mine grew up on Dr. Seuss. One of their particular favorites was "One Fish, Two Fish.

Click here for a banking version from Joshua Brown.

HT: The Big Picture.

Institutional Portfolios, Alternative Investments, and Liquidity

Before the recent meltdown in hedge funds, one of the regularly stated reasons for superior returns in "alternate investments" was that they are more exposed to "liquidity risk" (i.e. they can't be easily converted to cash without loss of value, and this results in higher required returns). Economics tells us that there's no such thing as a free lunch. So, here's recent (January 17th) story article from the Wall Street Journal that ties the two concepts together:

The ideal investment portfolio is solid and liquid at the same time. Perhaps because this principle defies the common sense of physics, even some of the world's biggest investors have overlooked it.

Now, with billions of dollars trapped in illiquid investments, many colleges and charities are cutting budgets at the worst imaginable time.

Read the whole thing here:

Finance Professors: Hot or Not?

A whiole back, I blogged on a research study by Felton, Koper, Mitchell and Stinson (sounds like a law firm, eh?) using RateMyProfessors evaluations to see whether the students' perceived hotness of their professors was related to their perceptions of professor quality. Crooked Timber (one of my favorite blogs) recently put this table up from the paper:


Just in case you didn't notice, Finance professors were rated as the hottest among the business disciplines (and accounting was rated least hot). So if you're deciding between a PhD in Finance and Accounting, if you want hotter colleagues, choose Finance, but if you want to look better by comparison, go with accounting.

But unfortunately, I definitely bring down the average. Ah well, back to the gym.

It's CFA Results Day And The Natives Are Restless

I just noticed a lot of hits today from searches related to "CFA Results". That's because today is the day that the results from the December 2008 Level 1 exam are released (they were actually released about 5 minutes ago). So, there are currently thousands logged into the CFA site and hiotting the "F5" button every couple of seconds.

Good luck to you all. If you passed, congratulations -- you now get to register for the Level 2 exam in June. In case you're wondering, there's enough study time to make it through the exam -- many have done it before you. But, you should get on it as soon as possible -- there are only 129 days until the Level 2 exam.

If you failed, here are some words of wisdom from one of the most well-known posters on the Analyst Forum website (which you should definitely use if you're studying for the CFA exams):

If You Failed
1) You are in distinguished company
I know a college finance professor who took 7 tries to pass three exams. This guy even wrote a college textbook on corporate finance. (That sounds like an apocryphal story, but I swear it's true but there is no way I'm posting his name).

2) Nobody will care
Everybody seems to have this dread that something terrible will happen when they tell their colleagues, boss, significant other, and parents. What will happen is they will say "Wow, hard test. When are you taking it again?"

3) You will be 6 months older when you get your charter.
I was in my late 30's so most of you will be at least ten years ahead of me when you get it even if you fail a few times.

4) You will get a solid foundation to build on for the next two levels
Learning this stuff again means you will learn it better, deeper, and more committed to long-term learning. This will pay dividends over the next couple of exams.

5) You failed a really hard exam
Every year the pass rate is less than 50%. In that >50% who fail number are oodles of smart people who studied hard. There is a ton of material on this exam and you have a career and a life outside of this exam. It's a bear and you don't even need an excuse for failing.

And to those who passed - Congrats and well done.

And I'd add that (as another poster in the same forum said):

...it's a big deal. But it's not THE big deal. Family, friends, and relationships are much more important in the long run. To paraphrase an old saying, I doubt any of you will say on your death bed "Damn! I wish I'd spent another 100 hour studying so that I passed the L1 exam in December of 08" At least, I sincerely hope not.

Having said that, good luck and congratulations (or sympathies, depending on whether you passed or failed).

As an aside, I tried to log on to Analyst Forum to see some of the posts regarding who passed or failed, and the system wouldn't respond for a a pretty good while. My guess is that there are too many people logging on for the same reasons. Not surprising - AF is a pretty tight community, and some of its members pretty much live on the forum.

Note: If you want to receive updates, either sign up for email on the right sidebar, or add our RSS feed to your feed reader.

It's Easy Buying A Stake in a Public Company

Here's one of the better explanations I've recently read on the idea of fundamental analysis or "value" investing (from the Ideas Report:

Buying a stake in a publicly traded company is deceptively easy. Log into your brokerage account, type in the ticker of the company whose stock you wish to buy, and—voilà!—you own a stake in the enterprise. Many investors don’t even refer to companies by their name; they simply invoke the ticker symbol. The ease with which stocks are bought and sold obscures the underlying nature of a stock market transaction and invites bad decision-making. The trick is to avoid thinking of a stock as a readily disposable piece of paper and instead consider that you are buying a percentage of a business whenever you purchase a share of stock.

Read the whole thing here

How Do You Choose The Right Chart For Your Information?

Now this is a cool flowchart - it works you through the decision process in deciding the rigth chart to best display your data. It's from The Extreme Presentation Method, which is a pretty good resource for those who regularly have to do these things,

Here's another diagram from the same site - it lays out process you go through in designing a presentation
:
HT: The Big Picture