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February 28, 2005
Oscars last night
Natalie Portman was robbed.
Posted by sam at 10:01 AM
February 25, 2005
2005 Business Idea Competition
One of my big projects this year was to run the Business Idea Competition, an annual competition in which BRV gives away $13,500 in prizes to very early stage businesses. Most of the entries come from Cornell.
Yesterday was the day, and today you can read about it in the Syracuse Post-Standard.
Posted by sam at 09:22 PM
February 23, 2005
Howard Dean at Cornell
Howard Dean was on campus today. We were hoping to see him but could not make the 10-minute window he had for a public appearance. Breean did see him walking into her building. He was telling jokes to a few students who ate it right up.
Posted by sam at 05:31 PM
February 20, 2005
BRIC emerging markets
NYT: Four Strong Emerging Markets. But How to Play Them?: "What do Brazil, Russia, India and China have in common? They have the greatest prospects for long-term economic growth among big emerging-market countries, in the view of many analysts."
Posted by sam at 08:56 PM
Beyond bullets
beyond bullets: Why Board Members Should Ban Bullets:
Adding text to a screen in a multimedia presentation that is identical to the narration harms the ability of the audience to understand the information. Removing the text increases retention, or the ability to remember the information, by 28%. Even more significantly, removing the text increases transfer, or the ability to apply the information, by 79%.Hmmm, I'll have to give that a try.
This is according to research by the most prolific researcher in the field of educational psychology, Dr. Richard E. Mayer, in his book Multimedia Learning.
Posted by sam at 08:21 PM
February 18, 2005
Happy birthday Dane!
Happy Birthday Dane! Let's run Gollum one more time! This is the last, I promise.
Posted by sam at 01:41 PM
February 17, 2005
Robert Frank on economic self-interest
NYT: The Theory That Self-Interest Is the Sole Motivator Is Self-Fulfilling
But some economists go so far as to say that self-interest explains virtually all behavior. As Gordon Tullock of the University of Arizona has written, for example, "the average human being is about 95 percent selfish in the narrow sense of the term." Is he right? Or do we often heed social and cultural norms that urge us to set aside self-interest in the name of some greater good?
...
France is, of course, not the only place in which the self-interest model's predictions fall short.
Most Americans, for example, leave tips even after dining in restaurants they will never visit again. We take the trouble to vote in presidential elections, even though no single individual's vote has ever changed the outcome in any state. We make anonymous donations to charity. From society's perspective, our willingness to forgo self-interest in such instances leads to better outcomes than when we all act in a purely selfish manner.
It's a new monthly column written by our very own Professor Robert Frank.
Posted by sam at 07:05 PM
A young person's take on privatization of social security
NYT: Greenspan Backs Idea of Accounts for Retirement.
The debate about privatization of Social Security (SS) to me comes down to whether SS is a tax or something else. As someone with absolutely no faith in ever receiving retirement from SS, it's a tax. If it's a tax fine, call it a tax and agree that the goal is to ensure a reasonable retirement for everybody - to maximize value to society. Take it out of my paycheck and let me try to forget about it.
The current system is a bit different. (Some of it) is my money, sure, but some beaurocrat will invest it in T-Bills and AAA bonds for 50 years and give me maybe 80% of what I put in. No thanks. Not to mention that our administration's poor fiscal policy gives me increasing unconfidence that the money will still be there when I retire.
Bush wants to privatize it, to turn it into something like an IRA or 401(k) and allow me to make my own investment decisions. That must mean that it's my money, right? If I'm an adult and can be trusted to make my own investment decisions, let me make all of my investment decisions - to maximize value to the individual.
And with my particular investment goals and risk profile, I might like to invest in assets likely not to be included in the options with a Fidelity Social Security Account™. In Brazil, Bulgaria, maybe Argentina. Maybe starting a business myself or investing in another small business. Will Fidelity give me those options? Probably not.
Given these four choices (taxation, state-run investment, privatization, nothing), I'll take the first or the last. The other two are strange in-between choices that minimize value to me (state-run investment) or to society (privatization).
Posted by sam at 03:14 PM
February 15, 2005
Testing Google Adsense
As you may have noticed I've begun testing Google Adsense here. I don't expect to make a ton of money but I just might cover my costs.
Regular readers may not see a whole lot of value out of these ads but I've seen increasing traffic from search engines. My hope is that some of this traffic will convert into real $$. We'll see how it goes.
Posted by sam at 07:37 PM
February 14, 2005
Finance question of the week
Update: this is a "famous" experiment performed in 1985 by Samuelson and Bazerman. They gave this very problem to 69 MBAs at Northwestern and allowed them to bid repeatedly with monetary incentives to perform well. The results: most students lost money over time and only five picked up on the core problem. Here it is:
If Company A bids any amount - call it $X - and Company T accepts the bid, Company T must be worth less than $X. Why? "Management of Company T is aware of the results of the exploration" and thus knows the true value of the company.
So given any bid between $0 and $100 per share, if Company T accepts the bid, management of Company T must know that the company is worth less than the bid. Otherwise they would never accept it. The correct bid is $0. I wanted to break that choice out of the $0 - $25 range but thought it might give away the answer. Big ups to whomever chose $0 - $25.
My professors conclusion from the results: "learning is neither easy nor fast."
Read this paragraph closely:
In the following exercise, you will represent Company A (the acquirer) which is currently considering acquiring Company T (the target) by means of a tender offer. You plan to tender in cash for 100% of Company T's shares but are unsure how high a price to offer. The main complication is this: the value of the company depends directly on the outcome of a major oil exploration project it is currently undertaking.
The very viability of Company T depends on the exploration outcome. In the worst case (if the exploration fails completely), the company under current management will be worth nothing - $0 per share. In the best case (a complete success), the value under current management could be as high as $100 per share. Management of Company T is aware of the results of the exploration but you have no access to that information.
Given the range of exploration outcomes, all share values between $0 and $100 per share are considered equally likely. By all estimates the company will be worth considerably more in the hands of Company A than under current management. In fact, whatever the value under current management, the company will be worth 50 percent more under the management of Company A than under Company T.
The board of directors of Company A has asked you to determine the price they should offer for Company T's shares. The offer must be made now, before the outcome of the drilling project is known.
How much would you bid for Company A?
Posted by sam at 12:06 PM
February 13, 2005
Google search of the week
I sincerely hope that whomever found this site by searching google for britney spears unlisted phone number for free found whatever it is that they were looking for.
Posted by sam at 03:21 PM
Graduation
I'm told that hotels in Ithaca are booked solid around graduation four years in advance. So if you're planning to visit us this May for graduation, be prepared to shack up at the Tingleff-Kay manor.
Restaurants on the other hand, are booked only a few months in advance. I'm told also that these restaurants ask for a non-refundable per-person deposit. If you will be in Ithaca on May 29th I need to know ASAP to make dinner reservations. This means you mom & dad.
Posted by sam at 11:26 AM
Smart Money Indicator
NY Times: Analyzing the I.Q. of Money:
Ever wonder what the smart money is doing? Walter Hertler, a technical analyst, thinks he has it figured out, and many stock market investors won't like the news.
Mr. Hertler consulted the Smart Money Indicator, a measure sometimes used to try to distinguish the activity of the wiliest professional investors from that of the less astute and less rational public. That barometer has sent one of its strongest sell signals in years, said Mr. Hertler, publisher of Hertler Market Signal Updates.
"The current sell signal appears to me to be comparable to the one that preceded the 2000 tops in the various stock indexes," he said. Followers of the index would have exited the market in early 2000, when the indicator peaked well below its old high as the market rallied to record levels. The signal came just in time to avoid the bursting of the Internet bubble.
Posted by sam at 10:07 AM
February 11, 2005
Read the disclaimer
First, the stock pick I gave for my investment and portfolio mgmt class:
Paychex Inc. (PAYX, NASDAQ; $30.76, 2/9/05), the second largest U.S. payroll processor, is best positioned to benefit from an improving hiring climate and continued shift to outsource HR functions. Q2 2005 (Nov. 2004) quarterly revenue grew 11% year-to-year with 9% growth in core payroll processing and 32% growth in HR and benefits outsourcing. The firm continues to leverage existing customer information gathered in the payroll processing service into secondary products such as taxes and regulatory compliance.The other students in my group chose Lexmark and Mohawk Industries.
Paychex demonstrated strong market power in 2004 through meaningful price increases and movement upstream with the Major Market Services (MMS) offering for larger customers. MMS currently makes up 12% of total revenue but is rapidly growing and will be a driver behind increased margins. The company has a long history of solid execution and will be one of the first to benefit from the current labor market recovery as small business formation grows and hiring picks up across the board. We think Paychex has room for top-line and margin growth both upmarket and internationally, as early reports of the company’s German startup are very positive.
Second, the disclaimer. I absolutely believe that small investors like you or I cannot make returns greater than the market by choosing individual stocks. If you assume that markets are characterized by 1) greed and fear in the short term and 2) efficiency in the long term; I can think of only three ways to earn excess returns:
- Rationality (greed) in a climate of fear
- Rationality (fear) in a climate of greed
- An informational advantage compared to other investors
If you read my quote above about Paychex, nothing I've said is anything but common knowledge. Which means it should all be reflected in the current value of the company. Buying Paychex then, is a bet that hiring will pick up faster than expected. Personally, I don't have enough information to make that judgement.
What does that mean? Our money will be going into mutual funds, entrepreneurial activities and an occasional individual stock for entertainment purposes.
Posted by sam at 01:36 PM
February 09, 2005
HP cans Carly
Ouch! As an exec it has to hurt when you're fired and the stock jumps 10% at opening.
Posted by sam at 02:26 PM
More Bush budgeting
This is just what I tell Breean...
Posted by sam at 11:41 AM
February 07, 2005
Fog of the Budget
From Business Week, The Fog Of The Budget:
This budget -- which will cover fiscal years 2006 through 2010 -- will largely ignore the costs of Bush's own top priorities, including Iraq, restructuring Social Security, and taming the Alternative Minimum Tax. Nor will it reflect the long-term costs of making his 2001 and 2002 tax cuts permanent, which will largely occur starting in 2011. At the same time, it will spotlight initiatives that are unlikely to save much money, such as effectively freezing spending on most domestic programs or slowing the growth in federal funding for Medicaid, the joint federal-state health program for the poor.
Such legerdemain will allow Bush to claim that he will meet his goal of slicing the deficit in half by fiscal 2009, the last budget he'll propose. But in reality, it will obscure an agenda that is likely to generate ever-larger deficits over the coming decades. ``It will show how tough the President can be on [some] spending,'' says Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates balanced budgets. ``But to leave out Social Security, the AMT, and the war costs and say you have a plan to cut the deficit in half over five years is beyond chutzpah.''
Posted by sam at 08:00 PM
Thanks Breean
More in our animal series...
Posted by sam at 06:29 PM
February 04, 2005
Harold and Kumar
We saw Harold and Kumar Go to White Castle tonight. Not Breean's favorite movie ever but I definitely liked it.
Harold (on the left) and Kumar (right) remind me of my friends Randy and Jase.
Posted by sam at 10:37 PM
More crazy animals
this is freaky. From Jeff Nolan.
Posted by sam at 06:04 PM
February 03, 2005
Manolo's shoe blog
Manolo's Shoe Blog is the latest addition to the link love on the left. Good find Breean!
Manolo says, the Manolo he is not the big fan of any couture that looks like a skin condition.
Posted by sam at 10:23 PM
February 02, 2005
45% of Americans believe in creationism
From bubblegeneration, Evolution Takes a Back Seat in U.S. Classes:
"These findings set the United States apart from all other industrialized nations, said Dr. Jon Miller, director of the Center for Biomedical Communications at Northwestern University, who has studied public attitudes toward science. Americans, he said, have been evenly divided for years on the question of evolution, with about 45 percent accepting it, 45 percent rejecting it and the rest undecided.
In other industrialized countries, Dr. Miller said, 80 percent or more typically accept evolution, most of the others say they are not sure and very few people reject the idea outright."
That's just amazing. I read it as a long-term leading indicator of huge problems in the U.S. If half the population interprets the world through a creationist lense... what effect does that have on everyday decisions? Oh wait, that's Bush's non- "reality-based community."
Posted by sam at 04:52 PM
February 01, 2005
Plea for help
Breean was desperate to buy some classical music and purchased Follies of my Old Age Sins of My Old Age by Rossini. The unfortunate thing is that she mistakenly ordered a record!! What is that? It won't fit in our cd player and we can't figure out what to do with it.
Posted by sam at 05:28 PM
Eric's b-day
Happy Birthday Eric! In your honor we'll run an old favorite here. Don't forget to turn up the volume!
Posted by sam at 11:39 AM