Estimating the Required Return In a World of Heightened Uncertainty: Emphasizing the Equity Risk Premium

Heightened uncertainty over the past five years--due to the bursting of the NASDAQ bubble, the recession of 2001, the September 11th attacks, accounting scandals, and the oil shocks of 2005--has brought new challenges for securities analysts and portfolio managers. This observation is particularly relevant for fundamental equity managers using price relative and/or discounted cash flow (DCF) models. While correctly worrying about values of cash flow input (dividends, free cash flow, economic earnings) to DCF models, portfolio managers must be especially aware of risk factors that impact the required return or discount rate, and relatedly, market valuation multiples. This discount rate concern is evident in the stock prices of several large cap, “blue-chip” companies (for examples, Coca-Cola, General Electric, Pfizer, and Wal-Mart), whose stock market performance in recent years has been flat, despite a wide variation in interest rates over the December 1999 to March 2005 period and profits and cash flows rising

Balancing conservation with national development: a socio-economic case study of the alternatives to the Serengeti Road

Developing countries often have rich natural resources but poor infrastructure to capitalize on them, which leads to significant challenges in terms of balancing poverty alleviation with conservation. The underlying premise in development strategies is to increase the socio-economic welfare of the people while simultaneously ensuring environmental sustainability, however these objectives are often in direct conflict. National progress is dependent on developing infrastructure such as effective transportation networks, however roads can be ecologically catastrophic in terms of disrupting habitat connectivity and facilitating illegal activity. How can national development and conservation be balanced? The proposed Serengeti road epitomizes the conflict between poverty alleviation on one hand, and the conservation of a critical ecosystem on the other. We use the Serengeti as an exemplar case-study in which the relative economic and social benefits of a road can be assessed against the ecological impacts. Specifically, we compare three possible transportation routes and ask which route maximizes the socio-economic returns for the people while minimizing the ecological costs. The findings suggest that one route in particular that circumnavigates the Serengeti links the greatest number of small and medium sized entrepreneurial businesses to the largest labour force in the region. Furthermore, this route connects the most children to schools, provisions the greatest access to hospitals, and opens the most fertile crop and livestock production areas, and does not compromise the ecology and tourism revenue of the Serengeti. This route would improve Tanzania’s food security and self-reliance and would facilitate future infrastructure development which would not be possible if the road were to pass through the Serengeti. This case study provides a compelling example of how a detailed spatial analysis can balance the national objectives of poverty alleviation while maintaining ecological integrity

Active Investing in Strategic Acquirers Using an EVA Style Analysis

Employing an EVA style classification, we examine whether active investors (such as hedge funds and other long-short investors) can develop an alpha-generating strategy by classifying acquisitions based on the pre-acquisition EVA style quadrant of the acquirers. Over a recent ten-year period, the announcement evidence suggests that acquisitions across all style quadrants generate negative risk-adjusted returns: wherein the magnitude of economic gains from shorting acquirers is determined by EVA style characteristics; namely wealth creators or wealth destroyers. Moreover, we find that the potential for longing gains on targets of acquiring firms is also captured by EVA style

Tactical Asset Allocation and Presidential Elections

We analyze tactical asset allocation decisions around presidential elections using traditional methodology and then in the context of an efficient frontier analysis rather than the traditional stock-only or bond-only allocations in prior literature. To our knowledge, this is the first paper in the literature that addresses asset returns around presidential elections in a mean-variance efficient frontier framework. We find that the efficient frontier is sensitive to presidential time periods, with Democrats providing the best risk-reward opportunities over the long term, while Republicans provide better opportunities over the past quarter century

Prevalent low-grade dysplasia: the strongest predictor of malignant progression in Barrett's columnar-lined oesophagus

No abstract

Multidimensional integrable systems and deformations of Lie algebra homomorphisms

We use deformations of Lie algebra homomorphisms to construct deformations of dispersionless integrable systems arising as symmetry reductions of anti--self--dual Yang--Mills equations with a gauge group Diff$(S^1)$.Comment: 14 pages. An example of a reduction to the Beltrami equation added. New title. Final version, published in JM

A 16 x 16 CMOS amperometric microelectrode array for simultaneous electrochemical measurements

There is a requirement for an electrochemical sensor technology capable of making multivariate measurements in environmental, healthcare, and manufacturing applications. Here, we present a new device that is highly parallelized with an excellent bandwidth. For the first time, electrochemical cross-talk for a chip-based sensor is defined and characterized. The new CMOS electrochemical sensor chip is capable of simultaneously taking multiple, independent electroanalytical measurements. The chip is structured as an electrochemical cell microarray, comprised of a microelectrode array connected to embedded self-contained potentiostats. Speed and sensitivity are essential in dynamic variable electrochemical systems. Owing to the parallel function of the system, rapid data collection is possible while maintaining an appropriately low-scan rate. By performing multiple, simultaneous cyclic voltammetry scans in each of the electrochemical cells on the chip surface, we are able to show (with a cell-to-cell pitch of 456 μm) that the signal cross-talk is only 12% between nearest neighbors in a ferrocene rich solution. The system opens up the possibility to use multiple independently controlled electrochemical sensors on a single chip for applications in DNA sensing, medical diagnostics, environmental sensing, the food industry, neuronal sensing, and drug discovery