Fidelity Magellan Fund, 1995

2017 ◽  
pp. 1-16
Author(s):  
Robert F. Bruner
Keyword(s):  
Financial Performance ◽  
Equity Markets ◽  
General Information ◽  
Efficient Markets ◽  
Fund Managers ◽  
Risk Return ◽  
Money Managers ◽  
Efficient Markets Hypothesis ◽  
Over Time

This case reviews the financial performance of the Fidelity Magellan Fund up to mid-1995. In essence, the Magellan Fund has managed to “beat the market” over time under three different fund managers despite its enormous size ($51 billion at the date of the case). The tasks for the student are to assess the adequacy of this performance, evaluate its likely sources, and opine on its sustainability. The case affords the opportunity to consider the appropriateness of various possible benchmarks in a risk-return framework and to assess the reasonableness of the efficient-markets hypothesis. The case can be used in an introductory finance course to present general information about equity markets and the behavior of large, sophisticated money managers.

scholarly journals Testing the Empirical Validity of the Adaptive Markets Hypothesis

2017 ◽  
Vol 9 (2) ◽  
pp. 169-184
Author(s):  
Hany Fahmy
Keyword(s):  
Financial Markets ◽  
Behavioral Finance ◽  
Asset Allocation ◽  
Smooth Transition ◽  
Efficient Markets ◽  
Irrational Behavior ◽  
Smooth Transition Regression ◽  
Efficient Markets Hypothesis ◽  
Smooth Transition Regression Model ◽  
Over Time

The issue of market e¢ ciency attracted the attention of academicians since the existence of financial markets. Over time, two schools of thoughts were established: the efficient markets school and the behavioral finance school. Proponents of the former believed in the Efficient Markets Hypothesis whereas the latter brought evidence from behavioral finance and psychology to demonstrate that financial markets are inefficient and this inefficiency is attributed to the irrational behavior of investors in making financial choices regarding asset allocation and portfolio construction. Recently, an adaptive reconciliation was suggested, which posits that investors'adaptability is what brings back inefficient markets to efficiency. The purpose of this paper is to test empirically the validity of the Adaptive Markets Hypothesis via a smooth transition regression model with exogenous threshold variable. The results support the reconciliation and show that markets are indeed efficient sometimes and inefficient most of the time.

Do Fund Managers Misestimate Climatic Disaster Risk

2020 ◽  
Vol 33 (3) ◽  
pp. 1146-1183 ◽  
Author(s):  
Shashwat Alok ◽  
Nitin Kumar ◽  
Russ Wermers
Keyword(s):  
Disaster Risk ◽  
Fund Managers ◽  
Major Disaster ◽  
Money Managers ◽  
Over Time

Abstract We examine whether professional money managers overreact to large climatic disasters. We find that managers within a major disaster region underweight disaster zone stocks to a much greater degree than distant managers and that this aversion to disaster zone stocks is related to a salience bias that decreases over time and distance from the disaster, rather than to superior information possessed by close managers. This overreaction can be costly to fund investors for some especially salient disasters like hurricanes and tornadoes: a long-short strategy that exploits the overreaction generates a significant DGTW-adjusted return over the following 2 years.

scholarly journals Performance, corporate governance and new regulation

2017 ◽  
Vol 9 (18) ◽  
Author(s):  
Heriberto García
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Financial Market ◽  
Information Disclosure ◽  
Potential Growth ◽  
Listed Firms ◽  
Risk Return ◽  
Corporate Governance Code ◽  
Governance Practices ◽  
The Relationship

Abstract. After the adoption of the Corporate Governance Code (Code) in Mexico, many companies increased financial performance and the leveraged during the following five years; we investigated the effect of how those firms improved the corporate governance practices and how was translated into better risk return company. We analyzed how and where better corporate governance practices affects performance and what was the relationship with Transparency, New Regulation and Governance Practices. Also we explored the gaps between transparency and information disclosure of Mexican Firms listed in U.S stockexchange and non U.S listed firms our findings were related to the potential growth of the Mexico Financial Market, Law and Finance.Keywords: corporate governance, financial performance, regulationResumen. Después de la adopción del Código de Gobierno Corporativo en México, algunas compañías incrementaron el desempeño financiero y el uso de deuda durante los siguientes cinco anos, nuestra investigación se enfoca en como dichas compañías mejoraron sus prácticas de gobierno corporativo y como estas prácticas se han traducido en un mejor relación de riesgo y rendimiento. En esta investigación exploramos cómo y en dónde mejores prácticas de gobierno corporativo afectan el desempeño y qué relación tiene con laTransparencia, Nuevas Regulaciones y prácticas de Gobierno Corporativo. Con lo anterior también identificamos aquellas compañías que cotizan fuera de México para identificar potenciales diferencias en dichas prácticas.Palabras clave: desempeño financiero, gobierno corporativo, regulación

scholarly journals Sorismo en el contexto del geunismo

2012 ◽  
Author(s):  
Alejandro Sánchez-Seco López
Keyword(s):  
Great Recession ◽  
Body Politic ◽  
The Body ◽  
The Political ◽  
Efficient Markets ◽  
Efficient Markets Hypothesis ◽  
Economic Philosophy ◽  
The One ◽  
Regulatory Proposals ◽  
Economic Globalisation

En el contexto de una obra mucho más amplia y en ciernes, que propone como único sistema plenamente legítimo aquél cuyo cuerpo político viene constituido por la totalidad de habitantes del planeta, es conveniente traer a colación la filosofía política y económica de George Soros, porque aporta una visión muy diferente a la aplicada por los endiosados economistas que no supieron ver con antelación la Gran Recesión global en la que seguimos inmersos. La relación entre la realidad y el pensamiento es clave en el sorismo, como también lo es la distinción entre los diversos tipos de ciencias. La hipótesis de la eficiencia en los mercados también es cuestionada, junto con el concepto de equilibrio en economía, la incertidumbre y la falibilidad. También se acomete la crítica del fundamentalismo de mercado y a las propuestas regulatorias. Y todo en el contexto de una globalización económica poco política.Within the context of a much wider and developing piece proposing as only fully legitimate system the one the body politic of which is composed of the totality of inhabitants on the planet, it is convenient to bring to us the political and economic philosophy of George Soros for it adds a very different vision to that applied by the deified economists who could not in advance see the global Great Recession in which we keep on living. The relation between reality and thought is key within Sorism, as it is the distinction amongst the several kinds of sciences. The Efficient Markets Hypothesis is also put into question side by side with the concept of equilibrium in Economics, uncertainty, and fallibility. The critique of market fundamentalism is also implemented as well as the regulatory proposals. And all of it taking place within the context of a scarcely political but very economic globalisation.

scholarly journals Copreneurs: The Impact of Spousal Relationships on Business success In Nigeria

2020 ◽  
Vol 8 (2) ◽  
pp. 65-78
Author(s):  
Olufemi Aladejebi
Keyword(s):  
Financial Performance ◽  
Growth Performance ◽  
Division Of Labour ◽  
General Information ◽  
Business Success ◽  
Spousal Relationships ◽  
Perceived Success ◽  
The Family ◽  
The Impact ◽  
Financial Profitability

Copreneurship is a term used to describe a situation where the husband and wife manage the same company. Copreneurship is a branch of the family business. It is becoming popular among the type of businesses. The main objectives of this research study include the examination of how spousal relationships affect a firm's financial profitability, factors that limit and improve the effective functioning of copreneurial teams, and how decisions are made. A purposeful sample was used to select respondents. Data was collected from fifty-five (55) couples out of which forty- seven (47) were viable. The research instrument was based on a five-point Likert scale. The questionnaire administered contained 2parts, Part 1: contains general information while Part 2: contains Perceived success, financial performance, growth performance, shared dream, Leadership, personal needs alignment, Division of labour, complementary skills, supportive employees, competencies, adequate resources. The results showed that the primary operators of the businesses were mostly wives. The majority of the copreneurs benefitted greatly from their business relationship in terms of perceived success, financial performance, growth performance, and shared dreams.

Management Commitments that Maximize Business Impact from IT

2014 ◽  
Vol 29 (2) ◽  
pp. 114-127 ◽  
Author(s):  
Anne Quaadgras ◽  
Peter Weill ◽  
Jeanne W Ross
Keyword(s):  
Financial Performance ◽  
Case Studies ◽  
Value Creation ◽  
Management Practices ◽  
Publicly Traded ◽  
Business Impact ◽  
It Value ◽  
It Capabilities ◽  
Small Set ◽  
Over Time

As digitization becomes pervasive, many organizations struggle to drive value from the growing number of IT-related opportunities. We show how the drivers of IT value creation can be framed as firm-wide commitments to a set of IT capabilities. On the basis of 20 published case studies, we identify a small set of IT decisions that organizations must make to use IT to successfully enhance their impact. We group these decisions into a framework of four commitments. Making these commitments helps organizations reinforce what really matters over time, which in turn helps focus the attention of their employees. We demonstrate, via a survey of 210 publicly traded firms, that firms which are more effective in making these four commitments have higher business impact from IT, which in turn correlates with higher financial performance. We suggest the construct of commitment is a step toward unifying the IT value literature and creating an overarching concept that brings together many of the important management practices identified in previous work.

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