Don’t show your bias or slack off in your reports if you’re an analyst at an investment bank and want to move up in your career, finds new research from the University of Maryland’s Robert H. Smith School of Business. The research, from visiting finance professor Oya Altinkiliç, finds that analysts who issue negligent reports – characterized as overly optimistic or too bold with recommendations, or those that simply piggyback on earlier reports or corporate news – jeopardize their careers.
SMITH BRAIN TRUST – Companies run into problems when they focus too much on immediate outcomes. But finance students learn a different approach at the University of Maryland’s Robert H. Smith School of Business. “We focus on value maximization, not profit maximization,” says finance professor Michael Faulkender, associate dean of master’s programs. “Value is measured over the life of the activity, not the current outcome.”
Explaining the Cross Section of Commodity Returns
What’s the most useful way to look at commodity prices?
Crashes Can Be Avoided If Traders Move Slowly
Wall Street traders make the most money when they do their best to stay under the radar of other traders by making their trades slow and steady. This strategy also keeps the market from crashing, according to new research from the University of Maryland’s Robert H. Smith School of Business.
Russell Wermers, professor of finance and director of the Center for Financial Policy at the University of Maryland’s Robert H. Smith School of Business, participated in a dialogue on securities market regulation on Sept. 8, 2017 at Securities and Exchange Commission (SEC) headquarters in Washington D.C.
Competition Destroys Value, But It's Also Safer
People who study financial economics regularly assume that the markets in which firms sell their products are perfectly competitive, or alternatively that firms operate in isolation. This all-or-nothing thinking is unrealistic.
The risk landscape for banks has changed since last year. For starters, Congress and the Trump Administration have started discussions on a regulatory overhaul. And, meanwhile, interest rates are on the rise, and the Federal Reserve is shifting its focus toward maintaining economic gains made in the past few years. All this should further compel banks to embrace enterprise risk management – a relatively nascent strategy that seeks to to identify, assess and prepare for any potential dangers to an organization's operations and objectives as both a day-to-day routine and long-term strategic planning process, says the Smith School's Clifford Rossi. He discusses six big risks facing banks this year. Read more...
Berkshire Hathaway shareholders should feel reassured to see younger executives stepping up as retirement looms for chairman and CEO Waren Buffett, said David Kass, a Berkshire investor and finance professor at the Smith School. "Ted Weschler and Todd Combs, the two stock pickers Mr. Buffett hired a few years ago as part of his succession plan, have performed well for most of their time at Berkshire," Kass told The Wall Street Journal. Read more...
Newly confirmed U.S. Attorney General Loretta Lynch has a strong record for going after mortgage fraud, Smith Professor Cliff Rossi tells Bloomberg Business. He anticipates that Lynch will reinforce predecessor Eric Holder’s actions to hold lenders accountable for their role in the 2008 financial crisis. Read more...