Money changes everything Goetzmann, William N
2016., 20170815, 2017, 2016, 2016-04-12, 2017-08-15
eBook
"A magnificent history of money and finance."--New York Times Book Review
"Convincingly makes the case that finance is a change-maker of change-makers."--Financial Times
In the aftermath of recent ...financial crises, it's easy to see finance as a wrecking ball: something that destroys fortunes and jobs, and undermines governments and banks. InMoney Changes Everything, leading financial historian William Goetzmann argues the exact opposite-that the development of finance has made the growth of civilizations possible. Goetzmann explains that finance is a time machine, a technology that allows us to move value forward and backward through time; and that this innovation has changed the very way we think about and plan for the future. He shows how finance was present at key moments in history: driving the invention of writing in ancient Mesopotamia, spurring the classical civilizations of Greece and Rome to become great empires, determining the rise and fall of dynasties in imperial China, and underwriting the trade expeditions that led Europeans to the New World. He also demonstrates how the apparatus we associate with a modern economy-stock markets, lines of credit, complex financial products, and international trade-were repeatedly developed, forgotten, and reinvented over the course of human history.
Exploring the critical role of finance over the millennia, and around the world, Goetzmann details how wondrous financial technologies and institutions-money, bonds, banks, corporations, and more-have helped urban centers to expand and cultures to flourish. And it's not done reshaping our lives, as Goetzmann considers the challenges we face in the future, such as how to use the power of finance to care for an aging and expanding population.
Money Changes Everythingpresents a fascinating look into the way that finance has steered the course of history.
This study shows that weather-based indicators of mood impact perceptions of mispricing and trading decisions of institutional investors. Using survey and disaggregated trade data, we show that ...relatively cloudier days increase perceived overpricing in individual stocks and the Dow Jones Industrial Index and increase selling propensities of institutions. We introduce stock-level measures of investor mood; investor optimism positively impacts stock returns among stocks with higher arbitrage costs, and stocks experiencing similar investor mood exhibit return comovement. These findings complement existing studies on how weather impacts stock index returns and identify another channel through which it can manifest.
We analyze cross-sectional and time-series information from 46 equity markets around the world to consider whether short sales restrictions affect the efficiency of the market and the distributional ...characteristics of returns to individual stocks and market indices. We find some evidence that prices incorporate negative information faster in countries where short sales are allowed and practiced. A common conjecture by regulators is that short sales restrictions can reduce the relative severity of a market panic. We find strong evidence that in markets where short selling is either prohibited or not practiced, market returns display significantly less negative skewness.
Momentum in Imperial Russia Goetzmann, William N.; Huang, Simon
Journal of financial economics,
12/2018, Letnik:
130, Številka:
3
Journal Article
Recenzirano
Odprti dostop
Some of the leading theories of momentum have different empirical predictions that depend on market composition and structure. The institutional theory predicts lower momentum profits in markets with ...less agency. Behavioral theories predict lower profits in markets with more sophisticated investors. In this paper, we use a dataset from a major 19th century equity market to test these predictions. We find no evidence to support the institutional theory due to the lack of delegated management. We exploit a regulatory change in the middle of our sample period to test behavioral theories. We find evidence consistent with overreaction theories of momentum.
We introduce a methodology to estimate the historical time series of returns to investment in private equity funds. The approach requires only an unbalanced panel of cash contributions and ...distributions accruing to limited partners and is robust to sparse data. We decompose private equity returns from 1994 to 2015 into a component due to traded factors and a time-varying private equity premium not spanned by publicly traded factors. We find cyclicality in private equity returns that differs according to fund type and is consistent with the conjecture that capital market segmentation contributes to private equity returns.
Equity Portfolio Diversification Goetzmann, William N; Kumar, Alok
Review of Finance,
01/2008, Letnik:
12, Številka:
3
Journal Article
Recenzirano
Odprti dostop
This study shows that U.S. individual investors hold under-diversified portfolios, where the level of under-diversification is greater among younger, low-income, less-educated, and less-sophisticated ...investors. The level of under-diversification is also correlated with investment choices that are consistent with over-confidence, trend-following behavior, and local bias. Furthermore, investors who over-weight stocks with higher volatility and higher skewness are less diversified. In contrast, there is little evidence that portfolio size or transaction costs constrains diversification. Under-diversification is costly to most investors, but a small subset of investors under-diversify because of superior information.
The Financial Analysts Journal is a leading forum for sharing knowledge
about investment management. It often features academic research, but its focus has
consistently been on practice and how new ...knowledge can support one of society's
most important endeavors: preserving and growing assets for our collective economic
future. In this article, I review some key contributions about portfolio management
published in this journal. The lively debates demonstrate how asset management has evolved
through give-and-take discussion of innovation versus established practice. The
Financial Analysts Journal has consistently introduced its readers to
new ideas and methods. In doing so, it has greatly improved professional practice.
Disclosure: The author reports no conflicts of interest.
Editor's Note
Submitted 8 April 2020
Accepted 29 April 2020 by Stephen J. Brown
We study asset pricing over the longue durée using share prices and net dividends from the Bazacle company of Toulouse, the earliest documented shareholding corporation. The data extend from the ...firm’s foundation in 1372 to its nationalization in 1946. We find an average dividend yield of 5% per annum and near-zero long-term, real capital appreciation. Stationary dividends and stock prices enable us to directly study how prices relate to expected cash flows, without relying on a rate of return transformation. A reduced-form asset pricing model with persistent dividends and a time-varying risk correction is not rejected by the data.
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