David Kass

In Era of Trump, Investors Grapple with Tweet Risk

When President-elect Donald Trump took to Twitter to criticize Lockheed Martin for the price tag on the F-35 fighter jet, he sent the defense contractor's shares into a minor tailspin. A similar thing happened weeks earlier, when he tweeted a rebuke of Boeing for the price of the new Air Force One. With the Oval Office soon to be occupied by a Tweet-prolific commander-in-chief, investors are grappling with a new market force: Tweet risk. It's what happens when Trump unleashes a seemingly out-of-the-blue Twitter takedown and investors react. Experts from the Smith School explain the risks and potential opportunities for investors. Read more...

Latest Wells Fargo Fail a Temporary Setback

Wells Fargo’s recent “living will” stumble is just that, so look for the San Francisco-based company to submit a satisfactory financial crisis contingency plan to regulators the next time around, says Smith School finance professor David Kass. Wells Fargo failed to meet Federal Reserve and FDIC standards for a living will – a key requirement under Dodd-Frank, as a big bank’s plan for unwinding in a financial crisis minus taxpayer-funded bailouts. Read more...

Buffett to Smith Students: Master Salesmanship, Temperament

David Kass, far left, Warren Buffett, center, during a visit with Smith School students.Some 66 years ago, MBA student Warren Buffett trekked from New York to Washington, D.C., seeking career wisdom. He arrived unannounced at Geico, drawn there because it was chaired by his former professor, investing guru Benjamin Graham. It was a Saturday, but Buffett encountered a Geico executive onsite and seized the opportunity to glean several hours' worth of insight about the insurance industry and firm. A couple of weeks ago, Buffett paid that forward, sharing insights with 20 Smith School graduate students, during a meeting in Omaha, where Berkshire is headquartered. He spoke about salesmanship, temperament and what he looks for in a job candidate.Read more...

Why Is Warren Buffett Buying Airline Stocks?

An airplane silhouetted against the skyWarren Buffett once referred to airlines as an investment “death trap.” So why would his Berkshire Hathaway be placing big bets on airline shares? The Oracle of Omaha's railroad strategy offers some clues, says Smith School professor David Kass. The airline industry "has pretty much rationalized itself, similar to railroads," Kass tells Bloomberg. "They have their sort-of monopoly routes, they can price as they choose to maximize profits, and there are huge barriers to entry." Read more...

Election's Impending Market Effects

Though polls show Hillary Clinton losing ground to Donald Trump, her advantage in the betting markets continues. Ireland-based PaddyPower still shows Clinton with a 75 percent probability of winning, despite an alert from FBI director James Comey that the Clinton email investigation still has life. Smith School finance professor David Kass discusses how the 2016 U.S. presidential election would move market sectors if Clinton wins. Read more...

One Big Question About the AT&T-Time Warner Deal

AT&T's proposed $85.4 billion acquisition of Time Warner could be the first of a string of similar mergers to come. So you have to wonder: Why is Wall Street giving the deal such a cold shoulder? It could be a sense that the deal won't go through, or it could be a sense of market deja vu. "My first reaction?" says Smith School finance professor Richmond Mathews, "Oh, no. Here we go again." Read more...

Could Deutsche Bank Fine Spark a New Crisis?

Headquarters of Deutsche Bank in Frankfurt, Germany Deutsche Bank is facing a possible $14-billion fine from U.S. regulators for its alleged role in propping up the housing market in the lead-up to the Great Recession, igniting some fears that the unprecedented sanction poses a new set of risks for the Frankfurt-based bank and the global financial system. "Brace yourselves. Sooner or later, history repeats itself, and the banks will fail again," Smith School professor Peter Morici says. Read more...

Bettors Put Their Money on Clinton

Smith School finance David Kass follows the money in gauging the U.S. presidential outcome. He says bettors give Democratic nominee Hillary Clinton the edge heading into her second debate with Republican nominee Donald Trump. “PredictWise, a prediction market aggregator, shows that people with money on the line are betting that Clinton will win with a probability of 80 percent,” Kass says. Read more...

Buffett’s Wealth and the Role of Luck

Berkshire Hathaway chairman and CEO Warren Buffett’s 86th birthday on Tuesday prompted a CNBC writer to explore Buffett’s interpretation of luck as a success factor in business. Buffett discussed the topic in a 2013 meeting with MBAs, including a group led by Smith School professor David Kass. He took notes in 2013 and summarized Buffett’s take for CNBC this week. Kass says Buffett has stressed the importance of luck in his life, focusing not only on where he was born but also when and what gender. Read more...

Audio: Assessing the Latest Drug Pricing Scandal

Executives at pharmaceutical company Mylan have come under attack for giving themselves raises while boosting the price of a lifesaving injection device by more than 400 percent over the past nine years. Smith School finance professor David Kass compares the situation to a 2015 scandal, when hedge fund manager and pharmaceutical CEO Martin Shkreli raised the price of the AIDS drug Daraprim from $13.50 a pill to $750. Audio (3:41)...

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