Moneyterms Blog
FSA might act on insider trading
The FSA seems to be finally accepting that London has a serious insider trading problem. The increasing proportion of informed price movements (IPM) ahead of announcements certainly shows, not only that there is a problem, but also that it is getting worse. In spite of this the FSA seems inclined to play down the amount of insider trading taking place. This is worrying.
The value effect and efficient markets
Richard Beddard has blogged on some interesting new evidence for the value effect. He also refers to our long running argument over active investing. I have more to say on that, and I also disagree with Richard’s attack in financial theory. (more…)
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Moneyterms vs Wikipedia
Royal Bank of Scotland’s announcement of a rights issue to strengthen its balance sheet on Friday lead to a lot of people searching for more information. Approximately equal numbers of them choose the the top two results on Google UK for rights issue: Moneyterms and Wikipedia. Of course, I think those who read Moneyterms made a better choice, but I need to explain why this is not just a bias in favour of my own site, starting with examples of Wikipedia’s unreliability. I also think I can generalise to what types of websites can be trusted to get things right. (more…)
Investing for inflation
With interest rates falling, and political pressure to bail out those who have taken on mortgages beyond their means, inflation has once more become a risk. (more…)
Do you like the CEO's face?
A recent paper suggested a link between the “success” of companies and their CEO’s looks. The direction of the causation is not shown by the simple correlation, but I suggest that it is linked to the difficulty of picking the best of many strong candidates.
TV ad revenues: the slide is just starting
A post on Broadstuff on the rise of internet TV ends by asking why viewers who watch the same show over the net are worth less to advertisers than those who watch conventional TV. I think part of the answer is that the broadcasters want to keep it that way — as shown by their apparent reluctance to release internet viewing data.
Picking a core business
Strategic changes in what a company’s core business is are always risky, but I have been thinking about the contrasting fortunes of two conglomerates that both decided to focus on telecommunications. (more…)
Microsoft's bid for Yahoo
Like many huge bids, this appears to have a large element of make or break about it. Regulators permitting, it could also solidify Microsoft’s position in markets where it is strong. (more…)
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Spreadsheets compared
A perfect comparison of spreadsheets is impossible,: different people have different requirement. This is how they have worked for me over years (I am getting old enough to say decades) of usage ranging from large spreadsheets I did as an analyst, to small sheets for personal finance purposes. (more…)
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Mega-frauds and incentives
The “mega fraud” at SocGen is closely related to the problem discussed here. There is an agency problem that no-one seems to have a solution for. Large groups of people whose actions have a huge impact, from CEOs to proprietary traders, have incentives to behave in a way that serves neither society or shareholders. (more…)