Geeks trump alpha males as algos dominate Wall St. Andrew Patton: Modeling the Markets. Economist Andrew Patton parses the mysteries of the stock market. Photo credit: Jon Gardiner Durham, NC - As an ordinary guy making a living, Andrew Patton is as dismayed as the next person about the downturn in the financial markets. But as an economist whose research investigates the behavior of stock markets, he sees the past year's drop in the Dow Jones and NASDAQ as a source of valuable information.
Patton's work as a financial econometrician takes a close look at the way in which the prices of stocks and other financial assets rise and fall. The goal is to construct and test mathematical models that represent the behavior of stock prices, investment funds and other assets over a given period. "Unfortunately, stock prices are almost impossible to predict," Patton said.
"For instance, it is well known that a given bundle of stocks often decline in value together, but those very same stocks rarely increase in value together," he said. "It's spectacular," he said. Build a Company for the Long Term. Calculated Risk. Learning to Love Insider Trading. What Have VCs Really Done for Innovation? This is a guest post by Vivek Wadhwa, an entrepreneur turned academic.
He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Executive in Residence at Duke University. Follow him on Twitter at @vwadhwa. Back in 1986, when Bill Gates was still making sales calls, he pitched my group at First Boston on why we should bet the farm on Windows. Despite the risk involved, we gave his fledgling startup the deal. This wasn’t because of his financial backers (he didn’t even drop any names), but because we believed in his vision and nerdiness. In the same way, Google became a huge success long before the deep pocketed VC’s arrived to ride Larry and Sergey’s coattails. They simply had a great technology and winning strategy. So I’m miffed by the National Venture Capital Association’s (NVCA) claim that companies like Microsoft and Google “…would not exist today without the funding and guidance provided during their early stages by venture capitalists.”
How Long Does it Take to Build a Technology Empire? Have you ever seen a business plan with hockey stick revenue projections? It’s common for VCs to receive business plans showing sales growing from 0 to $100m in the first 5 years of a company’s life. In fact, growth conversations between VCs and management teams often cause angst. One of the reasons is that people from both groups tend to have unsubstantiated beliefs about how long it takes to build an important company.
Maybe these conversations would be easier if we simply knew how long it takes to build a successful company? Dashboard at 570 <br /><a href="#"><img alt="Dashboard at 570 " src=" height="100%" /></a> The answer is shown in the visualization. The study is based on a large sample of companies, specifically the top 100 publically traded software companies. The data are packed with interesting stories. Most successful technology companies aren’t rocket ships. Who would have thought? Philip Greenspun’s Weblog » How Wall Street is making its billio. Wall Street banks have had profitable quarters. JPMorgan Chase reported $3.6 billion in profit (more than $1 billion per month). Goldman Sachs was only slightly behind, at $3.2 billion. These profits supposedly came from “trading.” I asked a friend who has worked in the money business how this was possible. “For someone to make money trading, there has to be someone on the other side of every trade who is losing money.
I asked if they were taking any risk in order to earn this return. What kind of bonds are they buying? [A more old-fashioned way of making supranormal returns is insider trading, which was perfectly legal until the Crash of 1929 (history). Barron's Hedge Fund Rankings 2009: Top 100 List ~ market fo. Barron's is out with their annual hedge fund 100 list and we wanted to post up all the media relating to it. They mention that hedge fund assets plummeted from $1.9 trillion to $1.4 trillion throughout the course of 2008. That is a staggering number, but it definitely highlights the real problems the industry had during the year.
While redemptions were fierce over the last year, reports are out saying that nearly 80% of redemption activity was high net worth and retail investors, rather than institutions. This will definitely be interesting as it could affect the health of the industry moving forwards. If institutions suddenly drop their allocations to hedge funds, then there will be big ramifications across the industry. While many funds faltered, there have been a few all-stars over the past three years and Barron's highlights them on their list. Barron's breaks down their top 100 hedge fund list by 3 year annualized returns. Startups 101: The Complete Mint Presentation. The Brancatelli File at JoeSentMe.com. THE FOREST, THE TREES AND THE BAG FEESBy Joe Brancatelli April 23, 2009 -- When I talk to an airline executive, I'm usually the one ranting about a stupid trick or unfair policy that the carrier has imposed. But not a couple of weeks ago. In the middle of a conversation about cabbages and kings and meaningless things, an airline guy I speak to frequently went off on "ancillary revenue," the airline-industry euphemism for inventing fees for everything from checked luggage to in-flight coffee.
Accountants have rigged the system. They create a stream to track the ancillary revenue from fees and they look like heroes when they can report they earned the airline millions of dollars of "new" revenue. I was scribbling furiously, trying to keep up. The bean counters can't track the revenue dilution of all these new fees. I thought about his rant this week as the nation's largest carriers reported first-quarter earnings.
And do you know what most of them wanted to talk about? Web2ExpoSF 09: Douglas Rushkoff, "How the Web Ate the Econo. Back to Business - Wall Street Pursues Profit in Bundles of Life. Bootstrapper » Calculate This! 100 Financial Calculators Every E. Calculate This! 100 Financial Calculators Every Entrepreneur Needs Thursday, July 14, 2011 at 1:27pm by Site Administrator By Eliza Morgan Many entrepreneurs don’t have the luxury of having a separate accounting department, instead doing their own number crunching. It’s not always easy, but you can make it less difficult by making use of the huge number of free financial tools for businesses that are available on the Internet. Business Operations Don’t get caught off guard by the unexpected financial pitfalls of owning a business. Loans Unless you’re bootstrapping it, or you’ve come into quite a financial windfall, it’s likely that your business will need a few loans to get up and running.
Debt Management Don’t let your loans get out of hand. Business Debt Consolidation: Have multiple business credit cards or loans holding debt for your company? Investment Make your business and personal investment tracking easy with these investment calculators. Taxes Personnel Personal Finance. Financial Models for Underachievers: Tw. My buddy at Redfin, Glenn Kelman, decided he wanted to bare his financial soul so that other entrepreneurs could get greater insight into the witchcraft called financial modeling. In this two-part posting, he reveals his numbers and his lessons. They are eye-opening for most entrepreneurs.
Part I: Numbers Startups face one primary challenge: To never run out of cash. We’re glad we did. When first putting together our financial model, we looked online to calibrate spending assumptions. Rent, Per Employee, Per Month Redfin Model: $250. Initial Per-Employee Equipment Cost Redfin Model: $6,500. Monthly Benefits, Per-Employee Redfin Model: $600. Annual Payroll Tax Redfin Model: 12.5%. Quarterly Bonus Payout, as a % of the Total Possible Redfin Model: 85%. Annual Payroll Increase for Existing Employees Redfin Model: 6%. Percentage of Candidates for Which Redfin Paid a Recruiting Fee Redfin Model: 35%. For Employees Recruited for a Fee, the Recruiting Fee as Percentage of Annual Salary Part II: Lessons. Scholars Link Success of Firms To Lives of CEOs: Financial News. WallStreet JournalScholars Link Success of Firms To Lives of CEOsWednesday September 5, 2007 4:08 am ETBy Mark Maremont Should shareholders in a company care if the chief executive's child dies?
What if the mother-in-law passes away? Such things don't normally figure in investment decisions. But maybe they should, according to a recent study by three finance professors. Mining a trove of Danish government data on thousands of businesses, they were able to track links between CEO-family deaths and the companies' profitability over a decade. It slid by about one-fifth, on average, in the two years after the death of a CEO's child, and by about 15% after the death of a spouse. The study is part of an emerging -- and controversial -- area of financial research that delves into the lives and personalities of executives in search of links to stock prices and corporate performance. "When you go to the track, you study the horse," says David Yermack, a New York University finance professor. Mr. Is Bootstrapping Becoming Sexy Again? - Sramana Mitra on Strateg.
Posted on Friday, Mar 9th 2007 Gone are the days when entrepreneurs boasted at cocktail parties about how many million dollars they have raised for their startups. That was so very nineties! Yes, times have changed. Entrepreneurs seem to have become savvier. In the last 2 months, I have worked / spoken with several sets of entrepreneurs who are perfectly happy bootstrapping their companies. One pair, an experienced CEO and a technical founder, went through a startup right before, where they raised $60 Million, and watched their shares get diluted to less than 1%. This time, they are determined to do it right, not lose their shirt, and defer taking venture money for as long as they possibly can. Another has built a smallish company with just over a million in revenues, and simply doesn’t want to deal with venture investors, having had bad experience in a previous round. Is there a trend here? Silicon Valley, certainly, has matured.
You’ve also had a couple dozen buyout offers for craigslist. Java Quant - Quantitative Financial Algorithms. About Transferable Stock Options. Posted by Allan Brown, Director, Recognition & HR Systems We work hard to attract and retain the world's best talent in a number of ways, and a part of that is offering competitive compensation packages. We offer standard things such as competitive salary, cash incentives, restricted stock units and stock options. But we also aim to be innovative. So today we're announcing a new compensation program called Transferable Stock Options (TSOs). As with most employee stock option programs, Google's program to date has allowed employees to do two things with their options.
Upon vesting they can (1) hold them or (2) exercise them and then hold or sell the stock. With the new TSO program, employees will have an additional alternative: they can transfer (sell) their options to a financial institution through a competitive bidding process. Employees will still have the choice of simply exercising and then holding or selling the stock too. San Francisco magazine. Ripple Project Homepage. Welcome Brandon Wilson to Ripple Labs There’s been a bit of a buzz surrounding the recent arrival of software developer Brandon Wilson to Ripple Labs, mainly due to what he’ll be working on—smart contracts. In the Pursuit of Transparency With the crypto-community still trembling from the aftershocks of the MtGox collapse, the emergent theme has been one of transparency. ChipIn. China's Virtual Currency Threatens the Yuan. From Asia Times Online: "The so-called "QQ" coin - issued by Tencent, China's largest instant-messaging service provider - has become so popular that the country's central bank is worried that it could affect the value of the yuan.
Li Chao, spokesman and director of the General Office of the People's Bank of China (PBOC), has expressed his concern in the Chinese media and announced that the central bank will draft regulations next year governing virtual transactions. " "Tencent argues that Yang and the PBOC are overreacting, and some Internet analysts agree.
Nevertheless, there is no question that the virtual-currency trend is catching on in China, and the endgame is unclear. Tencent boasts more than 220 million users, and its QQ coins can be purchased with a bank, telephone or "QQ" card at an official price of 1 yuan (12.5 cents) per coin. Yahoo! Finance - Get stock quotes, market. GStock Supercomputer - Free stock picks, Get Rich Slowly. Lesson from Khosla: Take. Lesson from Khosla: Take < $1M in venture capital Vinod Khosla, one of Silicon Valley's more successful venture capitalists (having hit homeruns backing Juniper, Cerent and Siara Systems, all of which became billion-dollar companies), has long said the trick is investing small amounts of capital.
His highest returns came disproportionately from investments where he put in less than $1m, and from where he had a board seat, according to data investor Paul Kedrosky said he got from a recent Khosla powerpoint presentation. Tags: Vinod+Khosla TrackBack URL for this entry: Links to blogs that reference this entry: Interesting, and not that surprising.
There's probably some corelation between companies that raise less than $1MM and those that are capital efficient and must adapt quickly to the market. Its true..I have a new venture starting up and initially I planned to raise $5M; and I was getting it too. Hes No Angel - January 1, 2005. Tech investor Ram Shriram likes to play innocent, but with a stake in Google that's nearing $1 billion, the act is proving increasingly tough. (Business 2.0) – Ram Shriram is by nature a cheerful, easygoing guy, but if you want to get him a little miffed, just call him an angel investor. That's the mistake I made recently, when I cruised down to Silicon Valley and met with him on a sun-flecked afternoon. Obviously, I meant no offense; in fact, the unctuous phrase I applied to him was "the hottest angel in the Valley.
" Yet Shriram was quick to disclaim the appellation, insisting that angels—typically wealthy tech veterans who sink cash into infant companies before they're ripe for venture capital—"don't really do what I do. " Shriram instead prefers to think of himself as a kind of startup sherpa: a grizzled guide for budding entrepreneurs as they scale the industry's peaks.
Google's outsize success fixed a giant halo above Shriram's 48-year-old head. Benchmark Capital. Winter 2007 Funding. EarlyStageVC: So What Does Web 2.0 in the. Accounting. Currency converter in the past.