The reason for this assignment is to analyze investment banking companies and the industry. Publicly traded investment bank companies include Goldman Sachs and Morgan Stanley. The analysis range from J.P. Morgan Chase, Wells Company and Fargo, and Bank or investment company of America Corp. Merrill Lynch. Additional companies can be added at your discretion. The analysis is to add a review of recent income statements and balance linens and the companies’ performance before and following the recent recession. Ratio analysis also needs to be included. Comment on the article: “The Buyers Are Back: M&A Poised to Rebound in 2013.” Do you agree or disagree with the forecast?

The assignment arrives by 6:00 pm on January 15, 2012. Late submissions will never be accepted without previous permission. The assignment will probably be worth 45 points. The assignment is usually to be 1-3 pages, single and typed spaced. Grammar, spelling, and punctuation will be graded combined with the content of the task. The assignments should be sent in a plain, simple, easy-to-read Word and Excel file. Include your name near the top of each record.

There is to be no conversation of the task or cooperation with others, or jointly such as research organizations separately. If such discussions or consultations occur, all included students might get as low as ZERO for the task or an “F” for the course. The assignments are to be submitted using SafeAssign in Blackboard. Go to Assignment 1 in the Content section.

But if you go short, because expected results are low, your expected come back on that brief position continues to be negative then, even though it’s a small negative. If you think expected profits for shares is a minimal 2-4%/year going out, why on earth would you brief the S&P 500 for an expected loss of 2-4%/12 months?

That makes no sense to me. Anyway, it’s yet another thing that is baffling me lately. Again, this doesn’t connect with the macro hedge funds because they are active traders. They don’t really go short and sit on it for years (well, some actually do that but still take care of their risk well enough to earn money).

OK, so to get to the original subject of what this post is about. I really benefit from the research by Pzena Investment Management. I keep discussing them but I don’t own any funds they manage, nor do I own the stock. And I have no idea anyone who works there either, merely to be clear as it might seem like I’m promoting them. Anyway, check these charts out. They are sort of mind-blowing. And for value investors, very exciting to see.

  • 2:00 am New York time / 7:00 am London time/ 3:00 pm Hong Kong time
  • What do you Mean by Negative Shareholder’s Equity
  • Phone Calls
  • CA = (X-M) +
  • Growth in the work force of working age (latest UN people projections)
  • Using Scenario supervisor to perform awareness analysis
  • VA doesn’t have a specific policy regarding short sales
  • 2010 $535.00 23% $121.00 939,322 $317.00

The charts here are the valuation of underneath quintile stocks set alongside the average (or equal-weighted composite valuation). The bigger the physique, the cheaper the cheapest stocks are set alongside the average. Figure 5 shows the same but compares the cheapest stocks to the most expensive. So as to the pass on reaches historically high levels. That’s kind of amazing. This is very, very interesting considering the big boom now in ‘passive’ strategies. Does this look like an environment where you’ll want to get passively?

OK, so to here in ways up, just what exactly? That’s ideal for long/short equity funds. But what about long-only value guys? Well, Pzena has already thought of that, and here is how underneath quintile (cheap) has performed three and five years following the spread widens. Alpha may not be encouraging if you are a big bear too.

How to try out It? Obviously, the apparent way to play it is to stick with cheap stocks. That is clearly a good plan always, but it looks like it’s a really, great idea now really. But, there is another interesting idea here. Most of you have probably already considered this.

You know that one of my favorite authors and finance managers has a company running mutual funds. Yes, Joel Greenblatt. I’m so predictable. And yes, I understand, the Gotham Funds have never been doing this great performance-wise. But if you start to see the above charts, it’s easy to see why: expensive stocks and shares have been getting more expensive and cheap stocks are getting cheaper.