...contest to ‘hedge’ your position. In finance there are numerous strategies used, a number of which I will explain later. The goal of a hedge fund is to generate positive returns no matter what the market does. A hedge fund can be described as an “actively managed private investment fund that seeks positive attractive returns”. Frush, Scott. (2006). Understanding Hedge Funds. Ann Logue differentiates them from other investment tools, “They differ from so called ‘real money’ traditional investment accounts such as mutual funds, pensions, endowments and so forth, because they have more freedom to pursue different investment strategies”. Logue, Ann C. (2006). Hedge Funds For Dummies. This comment is valid as for the most part they are not as heavily regulated as other investment institutions. In his book Investing in Hedge Funds (2005), Joseph Nicholas asserts that in days gone by the term hedge fund is actually used to describe both a structure that is “a co-mingled investment fund” and a strategy. Today, however he argues that it is best describes the context of the structure of the investment and the strategy used to help the strategy come to fruition. Similar to most private equity funds hedge funds are set up as limited liability companies or partnerships to protect investors from being exposed to losses more than their initial investment. Typically fund fees are structured in two parts, a management fee of 1-2% of the assets being managed and a performance fee of 15-20% of...
Words: 2210 - Pages: 9
...fund-level familiarity bias, in addition to behavioral and demographic characteristics of earlier studies. Behaviorally biased investors typically make poor decisions about fund style and expenses, trading frequency, and timing, resulting in poor performance. Furthermore, trend chasing appears related to behavioral biases, rather than to rationally inferring managerial skill from past performance. Factor analysis suggests that biased investors often conform to stereotypes that can be characterized as Gambler, Smart, Overconfident, Narrow Framer, and Mature. & 2011 Elsevier B.V. All rights reserved. 1. Introduction Previous studies of behavioral biases in the investment decisions of individual investors focus on the selection of individual stocks. Odean (1998, 1999), Barber and Odean (2001), and other empirical studies show that the stockpicking decisions of individual investors exhibit a variety of behavioral biases. However, little...
Words: 25255 - Pages: 102
...Investing in the Philippine Stock Market: Worth it! A Term Paper Presented to Ms. Auracel Laplana-Alejandro Humanities Division Ateneo de Davao University In Partial Fulfillment of the Requirements for the subject ENGL 23 – Writing Across the Disciplines Second Semester, SY 2014-2015 By Ronsard-Novem N. Timan Adlin Joey Almencion February 20, 2015 Investing in the Philippine Stock Market: Worth it! By: Ronsard-Novem N. Timan Adlin Joey Almencion Thesis Statement: This paper aims to discuss that although Investing in Stock Market is volatile, risky, and the maintenance is costly, it is a secondary of income, Highly Profitable and has a Long Term Benefits. Outline: 1.0 Introduction 2.0 Background 2.1 Stock 2.1.1 Types of Stocks 2.2 Stock Market 2.2.1 Purpose and Function of Stock Market 2.3 Philippine Stock Market 2.3.1 Brief History of the Philippine Stock Exchange 2.4 Income Bracket for Investment 2.5 Attitude of Filipinos on Investments 3.0 Advantages of Investing in Stock Market 3.1 Earn more Money 3.2 Long Term Growth Benefits 3.3 Highly Profitable 4.0 Disadvantages of Investing in Stock Market 4.2 Risky 4.3 Costly Maintenance 5.0 Refutation 6.0 Conclusion Investment can be considered as a Capital for each company to start their operations. Investment is not only limited to companies, but also for individuals. It is designed to be a source of income for those who have no interest in...
Words: 3292 - Pages: 14
...Why is China investing in Africa? Evidence from the firm level By Wenjie Chen, David Dollar, and Heiwai Tang1 August 2015 Abstract China’s increased trade with and investment in Africa has boosted the continent’s growth rate but has also generated considerable controversy. In this paper we investigate China’s outward direct investment (ODI) in Africa using macro and micro data. The aggregate data on China’s ODI in African countries reveal that China’s share of the stock of foreign investment is small, though growing rapidly. China’s attraction to resource-rich countries is no different from Western investment. China’s ODI is uncorrelated with a measure of property rights and rule of law, whereas Western investment favors the better governance environments. As a result, Chinese investment in strong and weak governance environments is about the same, but its share of foreign investment is higher in the weak governance states. The micro data that we use is MOFCOM’s database on all Chinese firms investing in Africa between 1998 and 2012. We use key words in project descriptions to code the investments into 25 sectors. This database captures the small and medium private firms investing in Africa. Contrary to common perceptions, there are few projects in natural resource sectors. Most projects are in services, with a significant number in manufacturing as well. In our country-sector-level regressions based on firms’ transaction-level data, we find that Chinese ODI is profit-driven...
Words: 7801 - Pages: 32
...Trends and Calendar effects in Malaysia Stock Market Mahmoud Khalid Almsafir Nur Hanis Hazwani Binti Husni Ayman Abdalmajeed Ahmad Al-smadi Graduate Business School, College Of Graduate Studies, Universiti Tenaga Nasional, Jalan IKRAM-UNITEN, 43000 Kajang, Selangor, Malaysia. mahmoud@uniten.edu.my, hanis.husni@gmail.com, smadi370@yahoo.com ABSTRACT Investing can help a person's wealth to generate more, and investing in stock is proven as one of the most profitable forms of available investment. The benefits gained in stock broking are immediate Buy/Sell which investor can sell part of their investment any time and at low transaction cost. However, investing in stock will require investor to observe the market, as market can be a volatile place and investor need to acquire knowledge of what they actually are doing. This study will discuss the price trends over the year, and how it will get affected by the seasonality in Malaysia, which also known as the calendar effects. The factor to be investigated in this study is the price on holiday’s season, the January effect or any other monthly seasonality. The daily price of KPJ Healthcare Berhad for the year 2011 is the sample was chosen in this study. Further this study, data used is derived from the weak-form efficient markets hypothesis, which is the price history and case study. Regression method is used in this study in order to help achieving the findings. This should be a continuous study, and adding on more other...
Words: 4125 - Pages: 17
...the public issuance and distribution of securities of an issuing entity. They work closely with the issuing entity and provide advisory service, price offering of the security, underwrite the shares and introduce the issuing entity to investors via road shows. * Sell-side analysts: They follow a list of companies, all usually in the same sector, and provide regular research reports to the investment bank or brokerage houses clients. These analysts provide buy or sell recommendation on stocks after studying the trends of the industry, reviewing the financial statements of the company and interacting with the management of the company to understand its strategy. * Buy side analyst and portfolio manager: Buy side analysts and portfolio managers usually work in institutions such as mutual fund companies, insurance companies, hedge funds and other asset management companies. Analysts in these institutions perform the same duties as sell side ones. They will determine how promising investing in a particular company’s...
Words: 1129 - Pages: 5
...Style Drift and Portfolio Management for Active Australian Equity Funds † Andrew B. Ainsworth ∗ Kingsley Fong David R. Gallagher Current Draft: 30 April 2007 Australian School of Business, The University of New South Wales, Sydney, N.S.W. 2052 Abstract Using monthly active equity fund portfolio holdings, we examine the magnitude of style drift and decompose it into active and passive components. We find that while fund style tilts are consistent with their self-stated investment objective, there is variation in the degree of style bias within style groups. We document that funds actively adjust their portfolio holdings in response to passive style drift to retain a desired portfolio tilt. The degree of adjustment varies with the frequency over which the drift is measured, with funds being most responsive to changes in book-to-market and momentum drift. We also find that certain types of style drift affect portfolio turnover. Keywords: Investment style, style drift, consistency, portfolio management, investment performance. † This research was funded through an ARC Linkage Grant (LP0561160) involving Vanguard Investments Australia and SIRCA. The authors thank Adrian Lee and an anonymous referee for helpful comments and suggestions. We also thank Vanguard Investments Australia for research support. ∗ Corresponding author. Email: andrew.ainsworth@student.unsw.edu.au. Electronic copy available at: http://ssrn.com/abstract=1004670 Style Drift and Portfolio Management...
Words: 16463 - Pages: 66
...Financial Institutions Center Derivatives and Corporate Risk Management: Participation and Volume Decisions in the Insurance Industry by J. David Cummins Richard D. Phillips Stephen D. Smith 98-19 THE WHARTON FINANCIAL INSTITUTIONS CENTER The Wharton Financial Institutions Center provides a multi-disciplinary research approach to the problems and opportunities facing the financial services industry in its search for competitive excellence. The Center's research focuses on the issues related to managing risk at the firm level as well as ways to improve productivity and performance. The Center fosters the development of a community of faculty, visiting scholars and Ph.D. candidates whose research interests complement and support the mission of the Center. The Center works closely with industry executives and practitioners to ensure that its research is informed by the operating realities and competitive demands facing industry participants as they pursue competitive excellence. Copies of the working papers summarized here are available from the Center. If you would like to learn more about the Center or become a member of our research community, please let us know of your interest. Anthony M. Santomero Director The Working Paper Series is made possible by a generous grant from the Alfred P. Sloan Foundation Derivatives and Corporate Risk Management: Participation and Volume Decisions in the Insurance Industry By J. David Cummins Wharton School, University...
Words: 15024 - Pages: 61
...American Journal Of Business Education –Fourth Quarter 2014 Volume 7, Number 4 Olympus Imaging Fraud Scandal: A Case Study Dennis Elam, Texas A&M University-San Antonio, USA Marion Madrigal, Texas A&M University-San Antonio, USA Maura Jackson, Texas A&M University-San Antonio, USA ABSTRACT This case examines the two decade long tobashi scheme by Olympus Imaging Executives to hide $1.7 billion in losses. In the 1980s, a soaring yen and falling dollar caused bottom line income problems for many Japanese companies. Some companies sought to offset the declining revenue with zaiteku, a form of speculative investment. While early activities generated profits in 1987, by 1991 Olympus recorded 2.1 billion losses in yen. Rumors circulated that by the late 1990s, losses had grown larger. Rather than come clean and admit the losses, management continued to ‘double down’ with riskier investments. Olympus created a tobashi scheme to shift losses off the Olympus balance sheet. Olympus created a tobashi scheme to shift losses off the Olympus balance sheet. Companies located in the Cayman Islands were purchased via exorbitant Management and Acquisition Fees. When the first Western President, Michael Woodford, questioned these practices, he was fired after two weeks on the job. Woodford became perhaps the first CEO ever to blow the whistle on his own firm. The subsequent scandal brought arrests of the executive team, an 80% decline in share price, the threat of de-listing on the Tokyo...
Words: 5012 - Pages: 21
...Financial Statements Paper Teya Crawford ACC/280 Nov, 7 2011 Pamela Zanzucchi Financial Statements Paper Accounting is part of an organization that enables companies to analyze, record, and retrieve critical financial information that is used to determine a company's financial status. The purpose of accounting is to assist people with understanding the financial status of an organization and to provide the financial reports and insights needed to make sound decisions. It is important to effectively communicate this information in order for the business to be successful. There are four financial statements that are used to record information. They include: Income Statement, Balance Sheet, Retained Earnings Statement or Shareholders Equity Statement, and Statement of Cash Flows. Financial Statements Financial statements are reports that reveal where the money is stores, where it is taken from, where it goes, and where it is now. The four statements mentioned earlier: Balance Sheets, Income Statements, Cash Flow Statements, and Statements of Shareholder’s Equity, will be found in the Security and Exchange Commission (SEC) as a public record, if the organization is public. Private businesses will send those reports to stockholders such as owners and lenders of that business. The purpose of the Financial Statements is to give the people information about a company’s financial position and performance. They need to be relevant, reliable, understandable, and comparable...
Words: 881 - Pages: 4
...focuses on the effects of working capital management as measured by cash conversion cycle and net trade cycle on the firm performance for a sample of Turkish listed companies and searches for potential differences between the profitability effects of working capital management for the SMEs and for the bigger companies with an accompanying aim to examine whether net trade cycle can efficiently substitute for cash conversion cycle as a measure of working capital management. The research is conducted for the period of 2002-2010 by using pooled panel analysis with annual data. The findings suggest that an increase in both the cash conversion cycle and the net trade cycle improves firm performance in terms of both the operating income and the stock market return for SMEs where as for bigger companies a decrease in cash conversion cycle and net trade cycle is associated with enhanced profitability. Besides, the findings also imply that managers can use net trade cycle instead of cash conversion cycle confidentially. Keywords: cash conversion cycle, net trade cycle, firm performance, SMEs, emerging economies, panel data 1. Introduction The corporate finance literature has traditionally focused on the study of long-term financial decisions such as investments, capital structure, dividends etc. whereas current assets are important components of total assets and need to be carefully analyzed as well (Nazir and Afza, 2009). The investment firms make in short-term assets, and the resources...
Words: 4208 - Pages: 17
...materials are the copyright of Wiley Publishing, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. Close, Consolidate & Report FOR DUMmIES by Maire Loughran ‰ IBM LIMITED EDITION These materials are the copyright of Wiley Publishing, Inc. and any dissemination, distribution, or unauthorized use is strictly prohibited. Close, Consolidate & Report For Dummies® IBM Limited Edition , Published by Wiley Publishing, Inc. 111 River Street Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2011 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/ permissions. Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, The Dummies Way, Dummies.com, Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United...
Words: 5922 - Pages: 24
...Financial Accounting For Dummies From Financial Accounting For Dummies by Maire Loughran Financial accounting is the process of preparing financial statements for a business. The three key financial statements are the income statement, balance sheet, and statement of cash flows, and they serve two broad purposes: to report on the current financial position of the company, and to show how well the company performs over a period of time. Investors, creditors, and other interested parties rely on such information to find out whether a business is making or losing money, and they depend on financial accountants to help ensure that these statements are materially correct and understandable. Accounting Details in Different Kinds of Financial Statements The three key financial statements are the income statement, balance sheet, and statement of cash flows. All three record the same daily accounting transactions occurring in a business, but each presents the facts slightly differently. • Income statement: The income statement shows a company’s results of operations. Using this statement, you can see if a business has income or loss during the financial period. All the company’s revenue, expenses, gains, and losses appear on this financial statement. • Balance sheet: The balance sheet shows the health of a business from the day it started operations to the specific date of the balance sheet report.Therefore, it reflects the business’s financial position. The balance sheets lists...
Words: 10604 - Pages: 43
...Venture Capital and Private Equity Contracting This page intentionally left blank Venture Capital and Private Equity Contracting An International Perspective Douglas J. Cumming Associate Professor and Ontario Research Chair, York University – Schulich School of Business, Toronto, Ontario, Canada Sofia A. Johan Senior Research Fellow, Tilburg Law and Economic Centre (TILEC), Tilburg, The Netherlands AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Academic Press is an imprint of Elsevier Academic Press is an imprint of Elsevier. 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA 525 B Street, Suite 1900, San Diego, California 92101-4495, USA 84 Theobald’s Road, London WC1X 8RR, UK Copyright © 2009, Elsevier Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without permission in writing from the publisher. Permissions may be sought directly from Elsevier's Science & Technology Rights Department in Oxford, UK: phone: ( 44) 1865 843830, fax: ( 44) 1865 853333, E-mail: permissions@elsevier.com. You may also complete your request online via the Elsevier homepage (http://elsevier.com), by selecting “Support & Contact” then “Copyright and Permission” and then “Obtaining Permissions.” Library of Congress Cataloging-in-Publication...
Words: 236635 - Pages: 947
...Accounting Horizons Vol. 27, No. 2 2013 pp. 301–318 American Accounting Association DOI: 10.2308/acch-50434 Capital Structure, Earnings Management, and Sarbanes-Oxley: Evidence from Canadian and U.S. Firms Kelly E. Carter SYNOPSIS: I examine Sarbanes-Oxley’s (SOX) effect on capital structure. I find that SOX is associated with higher long-term debt ratios, as firms listed in the U.S. raise their long-term debt ratios by 2 to 3 percentage points. This finding is consistent with the idea that, although the reduction in information asymmetry associated with SOX could prompt managers to increase equity financing, debt is still safer and less costly than equity in the SOX era. Further analysis shows that the increase in debt occurs in the two quarters prior to SOX, suggesting that firms anticipate a higher cost of debt after SOX and acquire debt while it is relatively cheap. Also, firms that heavily (lightly) manage earnings prior to SOX use less (more) debt after SOX. This result is consistent with the view that firms that aggressively manage earnings before SOX reveal intrinsically weaker earnings after SOX, casting doubt on those firms’ ability to repay debt and relegating those firms to issue equity for financing purposes. Keywords: capital structure; earnings management; debt ratio; Sarbanes-Oxley. JEL Classifications: G32; G38. Data Availability: Data available upon request. Kelly E. Carter is an Assistant Professor at Morgan State University. I...
Words: 10135 - Pages: 41
