YanLu, David K. Musto and Sugata ray published a paper under the heading “Alternative Marketing for Alternative 
Investments” . Hedge funds are currently banned from advertising. New legislation contemplates lifting this ban, thus raising the question of whether the ban is good policy. The Paper address this question by analyzing a form of indirect hedge fund advertising that already exists: advertising by institutions running both hedge funds and mutual funds, where the ads promote either the overall institution or specific mutual fund products. The Paper find that institutions increase such advertising after hedge fund flows sag, and that such advertising predicts subsequent increased inflows for hedge funds. View full article »
Tag Archive: business
There was a unique study done recently paper titled “MARKET EFFICIENCY AND DEFAULT RISK: EVIDENCE OF AN 
ANOMALY FROM THE CDS AND LOAN CDS MARKETS” by Lawrence Kryzanowski, Stylianos Perrakis and Rui Zhong.
The findings where significantly positive pricing-parity deviations from a simulated portfolio that simultaneously participates in opposite legs of the undervalued and overvalued contracts in the CDS and LCDS markets for exactly the same underlying firm, maturity, currency and restructure clauses. These deviations cannot be accounted for by trading costs, illiquidity or imperfect data about recovery rates in the event of default, suggesting segmentation between CDS and LCDS markets. View full article »
The crisis has given the birth to new jargon’s and terminologies in the world of financial market, I had tried to
accumulate few of them from various sources:
accumulate few of them from various sources:
- [h]ypothecation is when a borrower pledges collateral to secure a debt. The borrower retains ownership of the collateral but is “hypothetically” controlled by the creditor, who has a right to seize possession if the borrower defaults.
In the U.S., this legal right takes the form of a lien and in the UK generally in the form of a legal charge. A simple example of a is a mortgage, in which a borrower legally owns the home, but the bank holds a right to take possession of the property if the borrower should default. View full article »
Talking about Arbitrage – drama film directed by Nicholas Jarecki and starring Richard Gere. A troubled hedge fund magnate desperate to complete the sale of his trading empire makes an error that forces him to turn to an unlikely person for help.
It is well-known that risk arbitrageur play an important role in the market for corporate control. After a tender offer, the trading volume increases dramatically in large part because of risk arbitrageurs activity.They take long positions in the target stock, in the hope that the takeover will go through. They are also usually hedged by taking short positions in the acquirer’s stock. View full article »
Guest Post : By Green
When the going gets tough, the tough get buying. The tweaked version of that hard-worn phrase could be an accurate 
way of describing some of those shrewd investors who buy shares in a downturn in the hope or belief that they will bounce back. Great successes can be achieved in this way. However, what do you do when the markets are on an upturn as the global indexes have signaled for close to five years in a row? Even when the studious foresee a continued momentum, there is a natural trepidation that the glass ceiling may suddenly bounce that trajectory.
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Recently Chris White of Green-stone Capital Management Partners shared his views on the topic, I thought of jotting and 
sharing some points which I found interesting to share.
Like other investing related terms, deep value investing is a much used, but perhaps less well understood term. So, first and foremost we were interested to learn more about what deep value investing really is.one of the many keen observations from Chris is that deep value investing requires strict price discipline on the part of the investor.
But, of course, it doesn’t stop there. Like other investing styles, deep value investing is as much art as it is science. View full article »
I have quarried in the past that risk free rate for doing the valuation of equities and got some interesting answers, wanted to share here.
This is holistic view where an average of 10 year debt YTM of five lowest ratio of govt debt to GDP:
The 10yr Treasury is still a decent risk free rate, but the U.S.’s sovereign debt load will soon match Greece‘s. It may already exceed that level if you count the unfunded liabilities of entitlement programs. View full article »
As I did a story few days back When to sell and When to buy ? trying to recollect the some book rules for Investments
that holds true in many adverse scenarios.
As all of you must be aware of that the field of behavioral finance has helped us to understand that we don’t always make rational investment decisions.
We often make poor decisions because of our biases. And the View full article »
Given the lameness of the bible of psychological diagnostics, the DSM, it’s pretty easy for the lay public to play armchair
psychologist, particularly in the realm of organizational behavior. The Financial Times supplies an unadulterated dose tonight in the form of an article titled, Call in the nerds – finance is no place for extroverts.
Here’s the premise:
There is a compelling body of evidence suggesting that the people most likely to go into the riskier areas of financial services are precisely those least suited to judging risk. Susan Cain’s recently published book Quiet cites a series of studies that suggest that extroverts tend to be attracted to the high-reward environments of investment banking, deals and trading. And, troublingly, these outgoing people also tend to be less effective at balancing opportunity and risk than some of their more introverted peers.
Ms Cain tells the story of Vincent Kaminski to show what can happen to a business when
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Warren buffet: A good business that can be purchased for less than the discounted value of its future earnings.
George Soros: An investment that can be purchased (or sold) prior to a reflexive shift in market psychology/fundamentals that will change its perceived value substantially.
Benjamin Graham: A company that can be purchased for substantially less than its intrinsic value.
Some other examples are: View full article »
