...transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher. Printed in the United States. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. We advise all readers that it should not be assumed that present or future recommendations will be profitable or equal the performance of previous recommendations. The reader should recognize that risk is involved in any option or security investment, and they should not assume that any formula, method, chart, theory or philosophy will result in profitable results or equal past performances. This publication should only be used by sophisticated investors who are fully aware of the risks in options trading. A reading of the options booklet prepared by the Options Clearing Corporation is recommended before trading options. No solicitation to buy or sell securities or options is implied. The information contained herein has been obtained from sources believed to be reliable, but there is...
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... Two portfolios need to be created, one to reflect asset allocation focussed on countries and the other on sectors, with the number of assets in each portfolio being no more than 150. Both portfolios must be actively managed, having at least an active risk of 3% when compared to the benchmark. To achieve this, I followed a three step top-down approach for our investment decision process. Firstly, I started with an analysis of the macroeconomic environment in Europe, followed by forming opinions on the relative strengths and weaknesses of the constituent countries and sectors, using the macro-analysis to determine which are most likely to perform well, given the long-run trends identified. Finally, I invested in all mid-cap companies within the selected countries and sectors, based on our judgement that middle sized firms are poised to prosper the most in this difficult economic environment, which I predict to remain tough for the foreseeable future. After finalising the initial portfolios in this way, I used BarraOne to optimise them. Following optimisation, I compared the risk profile of each portfolio to the benchmark. Our findings show that an actively managed portfolio, especially one constrained to 150 assets, will necessarily be less diversified than the benchmark. For the country portfolio, the lack of diversification materialised in a high level of currency risk, which I purposely limited using a constraint during the optimisation process. This was to be expected when...
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...examines how some great companies destroyed themselves. Morton T. Hansen is a management professor at the University of California, Berkeley (School of Information), and at INSEAD. Formerly a professor at Harvard Business School, Morten holds a PhD. from Stanford Graduate School of Business where he was a Fulbright scholar. He is the author of Collaboration and the winner of the Administrative Science Quarterly Award for exceptional contributions to the field of organization studies. Previously a manager with the Boston Consulting Group, Morten consults and gives talks for companies worldwide. Authors’ Big Thought: Ten years after the worldwide bestseller Good to Great, Jim Collins returns with another groundbreaking work, this time to find out: Why do some companies thrive in uncertainty, even chaos, and others do not? Based on nine years of research, buttressed by rigorous analysis and infused with engaging stories, Collins and his colleague, Morten Hansen, enumerate the principles for building a truly great enterprise in unpredictable, tumultuous, and fast-moving times. Great by...
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...Electric Cars Industry History of Automobile Industry The history of automobile dates back to 17th century as a Flemish Jesuit missionary, Ferdinand Verbiest, built a steam-powered vehicle to Chinese Emperor Kangxi as a toy. In 1769 French inventor Nicolas-Joseph Cugnot improved Verbiest’s car by constructing a car which could hold a driver. But only in 1886 German engineer Karl Benz invented the first real useful car, considered a first automobile powered by internal-combustion engine. A few years later, a guy named Henry Ford applied for work with Thomas Edison. Ford started working with steam-powered engines the Edison’s company used to make electricity for US cities. While working at Edison’s company Ford came up with machine called Ford Quadricycle, ran by internal internal combustion engine and in 1899 Ford founded the Detroit Automobile Company. Company soon failed and after few other unsuccessful attempts Ford finally formed Ford Motor, a first automobile manufacturer, company in 1903. In the beginning of car industry, a time when the technology was completely new, 40% of American cars were powered by steam, while 38% were electric and 22% had gas engines. So, in the beginning of the automobile industry it was really unclear which direction in will turn. Steam engine, internal combustion engine and electricity had almost equal starting positions to become a standard for powering cars. Even at the time with inventions of Thomas Edison and Nikola Tesla electricity may...
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...strength is that investment analysis thought like business people not like risk-taking speculators, with carefully selecting investment portfolios. Burgundy is focusing in valuation of individual company that gives an advantage when valuing the whole economy or many companies,because it is almost impossible to forecast the whole economy movement. But when focusing on one company it gives an opportunity to do almost exact valuation. The most important investment process consist of generating investment ideas, valuating them, financial analysis. Burgundy is collecting information from publications, subscriptions and industry conference which give an opportunity to closely track what is happening in company and in industry. Also, Burgundy is examining the historical performance of the company that give an idea on what what happening during many years and shows the attractiveness of particular company. In addition, it give the picture of whether this company is a safe investment or not. Another strength is that Burgundy is checking the legitimacy of company candidate and justify the future financial statements, the potential growth and that all statements were factual. They use different techniques to make sure that due diligence is met. One of the most important strengths is that Burgundy is using different methods of valuating the candidate company such as: intrinsic value relative to its current market value, discount cash flow,comparable multiple analysis and some other valuation...
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...Internet Texas Hold'em Winning Strategies from an Internet Pro First Edition By Matthew Hilger Introduction “If you can't spot the sucker in your first half-hour at the table, then you are the sucker.” This is a common poker saying spoken by Matt Damon in the classic poker movie Rounders. I used to play in a tournament every Sunday night in Costa Rica with some of the best players in the world. Unfortunately, I had no idea at the time who those players were. Hopefully this book will help you spot the sucker rather than be the sucker. It takes a lot of experience and study of the game before one realizes what it takes to play at an advanced level. Everyone needs to start somewhere. This book should increase your learning curve, but there is no substitute for experience. The Internet is an excellent vehicle to develop your game, no matter if you just play low limits a few hours a week or strive to develop into a world-class player. The following story gives you a glimpse into my poker life and the struggles I went through before I started playing on the Internet. My first memory of poker is sneaking out into the woods when I was about eight or nine years old to play penny poker with my friends. In middle school, I remember getting sent to the principal's office for playing craps in the bathroom. In high school, I was assistant manager at a local movie theater and one night my friends and I played poker in the projectionist booth while the movies were playing. To my...
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...Featured Chapter Creating a Strategic Direction Visions and Values Paul Olk, Peter Rainsford, and Tsungting Chung ncreased globalization and the incorporation of many new information technology (IT) tools have enhanced the need for top management to set a clear strategic vision for a company. As market demands and the ability to communicate globally encourage companies to continue to expand into new geographical and product markets—and as they also enter into long-term buyer-supplier relationships or contract out activities previously conducted internally—companies are spread more thinly. This creates a challenge of how to coordinate all of the activities conducted around the globe and by partner organizations. While sophisticated software programs (e.g., enterprise resource planning [ERP]) or intranet capabilities enhance internal communication, these are not adequate. Establishing and maintaining a consistent strategic direction for the company begins with setting a clear vision for the company. A strategic vision provides multiple benefits to a company. First, it presents a broadly shared sense of organizational direction and purpose. Direction is needed because few organizations have achieved greatness by being all things to all consumers. To instill a purpose, most successful companies achieved their leadership position by adopting a vision far greater than their resource base and competencies would allow (de Kluyver & Pearce, 2002; Hamel & Prahalad, 1989). A vision...
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...Introduction This stock analysis paper is for Marathon Oil (MRO) which has been chosen because the oil and gas sector is in the throes of an energy revolution in the United States. With the endless opportunities offered by fracking and the possibility that the United States has become a net energy exporter again after many decades, the prospects for the oil and gas sector are indeed bright. Further, MRO is a midcap company meaning that it is neither too big nor too small which means that it is on the cusp of a transformation where it can ramp up its operations in a scalable and sustainable manner without affecting either its financials or its core operating principles. The following are the calculations of two different models, the CAPM and the DDM or the Dividend Discount Model. CAPM= Rf + beta*(Rm-Rf), where Rf is the risk free rate, Rm is the expected market return and beta is the beta for the asset. CAPM=8%+1.7*(1.7*8%-8%) =17.52%, where risk free rate=8%, beta=1.7, MCR=1.7*8%=13.6% Under the DDM, Fair Value (P) = D/r-g, where D represents dividend paid, r represents discounting rate and g represents the expected dividend growth. The discounting rate is 13.6%, and the Fair Value=0.76/ (1.136-1.089) =16.17 Market Price = Expected Dividend Per Share + (Expected End of Year Price – Current Share Price)/ Current Share Price. Given the fact that Expected Dividend Per Share is 2.87, Expected End of Year Price is 45.3, and Current Share Price is 39.94, we get the Market Price...
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...1.1 An Overview of Paddy Power 1 2.1 MACRO (IPESTEL) 2 2.1.1 International 2 2.1.1a Expansion into Australia 2 2.1.1b Business-to-Business (B2B) Venture 3 2.1.2 Political/Legal 3 2.1.2a Offensive Ad 3 2.1.2b Under-age Bet 4 2.1.2c Rob Keane’s Lawsuit 4 2.1.3 Economical 5 2.1.3a Global Economic Downturn 5 2.1.3b Foreign Exchange Rate 5 2.1.4 Socio-Culture 5 2.1.4.a Responsible Gambling 5 2.1.4b Sports and Social 6 2.1.4c Health and Safety Policy 6 2.1.4d Publicity stunts 6 2.1.5 Technology 7 2.1.5a Mobile Betting 7 2.1.5b Acquisition Cayetano 8 2.1.5c Marketing Strategy 8 2.1.6 Environmental 8 3.1 MICRO (THE COMPITITIVE ENVIRONMENT) 8 3.1.1 Supplier 8 3.1.2 Buyers 9 3.1.2 Competitors 9 4.1 Cultures and Globalization 11 5.1 Conclusions 11 Appendix 12 Works Cited 13 THE INTERNAL AND EXTERNAL BUSINESS ENVIRONMENT OF PADDY POWER 1.1 INTRODUCTION Paddy Power, Irelands biggest, most successful bookmaker is an international betting and gaming group. Since 2012, an estimate of €5 billion what of bets have been placed by Irish online gamblers alone (Duffy, 2015). In this case study, we will focus our environmental analysis on the bookmaking industry and Paddy Power in particular. This will include the internal, external analysis and how international management has affected the company. Why Paddy Power? The company claims to be the most innovative and security conscious bookmakers (Paddy Power, 2011). They have also drawn a lot of criticisms in the...
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...Thomas E. Augustyn Iowa School of Banking 2009 Intersession Project Banking Regulation Summary There is one legislative issue which will be ultimately responsible for the future direction and degree of bank regulation. This issue is the management/regulation of the financial services industry that contains “systemically relevant” (aka “too big to fail”) firms. Management & regulation goals must be 3-pronged: 1. It must be strong enough to prevent the failure of “systemically relevant” firms (without artificial outside support)or provide for a less-traumatic winding down of a “systemically relevant” firm. 2. It must prevent the emergence of more “too big to fail” firms 3. It must not be so stifling as to prevent the controlled growth of safe and profitable financial service businesses. Analysis Up to 1999, banking regulation had been fairly constant since the Great Depression ended. The Golden Rule had been the Glass-Steagal Act. The Glass-Steagall Act, was passed by Congress in 1933 and prohibited commercial banks from engaging in the investment business. It was enacted as an emergency response to the failure of nearly 5,000 banks during the Great Depression. The act was originally part of President Franklin D. Roosevelt’s New Deal program and became a permanent measure in 1945. It gave tighter regulation of national banks to the Federal Reserve System; prohibited bank sales of securities; and created the Federal Deposit Insurance Corporation (FDIC), which...
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...22 The future of online grocery in Europe The online-grocery market is poised for growth. But only early movers will win—and only if they are adept, disciplined, and agile. Nicolò Galante, Enrique García López, and Sarah Monroe Just because Europeans aren’t buying groceries online en masse doesn’t mean they don’t want to. In fact, many of them love the idea of saving time by not having to trek to a supermarket, push a shopping cart down aisle after aisle, then wait in the checkout line. The convenience of shopping for groceries online is alluring. But convenience isn’t everything. Consumers will shop for groceries online only if the offer is right: they’re not willing to sacrifice the price, quality, and range of products that they’ve grown accustomed to in the supermarket, and they won’t put up with inconvenient delivery or pickup arrangements. To date, few European retailers have given consumers a compelling reason to switch from the neighborhood grocer to the Web. That could soon change. Based on our latest research, we believe the advent of the “click and collect” model—which allows customers to place orders online and pick them up at a store or other designated location—could entice more retailers, as well as more consumers, to the online-grocery space. Nevertheless, getting into e-commerce isn’t a trivial matter for a grocery retailer. Will the payoff be worth the investment? Our research, which included a survey of more than 4,500 European 23 consumers...
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...financial crisis that hit the USA in 2008. A Close look at financial analysis specifies that theoretical modeling based on unrealistic anticipations led to serious problems in mispricing in the enormous unregulated market for credit default swaps that exploded upon catalytic rises in residential mortgage defaults. Latest academic research suggests solutions to the economic crisis that are appraised to be far less costly than bailing out investors who made poor decisions with respect to credit analysis. Introduction The financial crisis that occurred in 2008 is of such epic proportions that even astronomical amounts spent to address this issue have by far been not able to resolve it. This economic crisis is the worst to ever hit USA since the great depression and is utmost important to economists since this led to 2.6 million unemployed furthermore 3.4 trillion dollar were lost in real estate wealth and the stock market also lost 7.4 trillion according to the Federal Reserve. Besides the $700 billion bill approved by Congress, the Federal Reserve has bailed out institutions and markets by generating about $1.3 trillion in investments in various risky assets, also including loans to otherwise bankrupt organizations & collateralized debt obligations which were completely backed by subprime mortgages that were defaulting at rapid rates. Furthermore a $900 billion is in the process of being proposed in lending to big businesses (Aversa, 2008), leading the total amount to approximately...
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...“The Collapse” Mark Beasley (30 March 2010) Extract: Bill Wrinkle had it all; he was the leader of one of the most powerful financial institutions in the world, he had the respect (and some might say fear) of his rivals and colleagues and he had the beautiful wife and house. Bill had come from the tough streets of New York armed only with what many competitors called “cunning street smarts” and a propensity to bully and intimidate. He was lauded by the press as a pioneer in the “new economy” expanding his company into new exotic financial products and business lines as well as moving his firm into geographic locations not entered by foreigners before. However, that was all about to change as his life’s work began to crumble and fall all around him in the autumn of 2008. His days of enormous risk-taking and swaggering bravado was about to lead him and some 50,000 employees down a precipitous path to eventual destruction. “How had it come to this?” It was an unseasonably warm evening on the 5th of September 2008 when the lights of Bill Wrinkle’s midnight blue Mercedes lit up the forecourt of his expansive Greenwich, Connecticut home. Of all the palatial mansions that lined the treehugged streets of this part of the world, Bills was by far the most spectacular – a 12 bedroom oasis with tennis court, indoor squash court (which the talented player used almost daily), a 50metre infinity pool, and, enough land to host some of the more grander social gatherings of New Yorks...
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...A Financial Analysis on Indian Chemical Industry [pic] Submitted To: Prof. Jadhav Aditya Mohan Submitted By: |Name |Seat # |Enrollment # | |Soumya Chaturvedi |5 |11BSPHH010831 | | | | | | | | | | | | | | | | | CONTENTS ➢ Acknowledgement……………………………….. ➢ Objective…………………………………………1 ➢ Covariance………………………………………. ➢ Correlation………………………………………. ➢ Beta and its role…………………………………. ➢ Beta coefficient………………………………….. ➢ Capital asset pricing model (capm)……………... ➢ Cost of equity……………………………………. ➢ Weighted average cost of capital (wacc)………... ➢ Bibliography……………………………………... ACKNOWLEDGEMENT I would like to express my gratitude to our finance professor MR. JADHAV ADITYA MOHAN who gave us the opportunity and subsequent guidance to complete this project. A mission of this project was to get practical insight of the chemical and fertiliser industry. This project helped us in learning of financial concepts by applying them and ascertaining the various financial details of the...
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...This essay is based on the 2007 book The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb (1960 - ). It is hardly an obscure tome, having been on the New York Times bestseller list for several weeks. Before I get to the essence of this essay I believe explaining what the term “Black Swan” means and saying a few words about the author would be in order. It was once thought in the Old World that only white swans existed. Then from Australia came the realization that there were black swans. And no, they were not white swans made black by bootblack or any other artificial coloring medium. After millennia of observations in the West of millions of white swans, the sighting of one black swan was enough to invalidate this long and firmly held belief. In a broader sense then A Black Swan is a sudden, monumental, and completely unexpected event. WWI, WWII, and 9/11 were Black Swans. If one were to win a multi-million dollars lottery that would be a personal Black Swan (Black Swans are not all negative, although given the troubles experienced by some of these huge lottery winners, this might also be negative). But a Black Swan is more than this – it goes to the heart of and challenges the putative acceptance of Gaussian probabilities. Least you think Gaussian or bell shaped probability functions are theoretical only and not important in real life, then consider that not only mathematics, but engineering, medicine, social sciences, economomics, the insurance...
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