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Invesment Banking Series: Roadshows

Investment Banking Series Post 7 Roadshows 1. What is it anyway? Roadshow is basically marketing of the firm issuing securities to the potential investors. CFO, CEO and a few more people from senior managers hit the road and make presentations to all kind of investors in both group and one-to-one meetings. The presentation's contents are typically heavily curated by investment bankers to make sure that the equity story is as smooth and persuasive as possible, and they show and tell only the positive sides of their business. There would be an explanation of the existing business, and the expansion plans that will be financed by the proceeds from fund-raising. It is actually also a good opportunity for junior bankers to meet the company that they spend many days and nights to make look good in the pitch book. And the savvy ones would make good use of it to connect with the CEOs and CFOs that in the future may benefit from their investment banking services. 2. Inv...
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[Article Comment] Economists Have a Lot to Learn From the Weather

A comment on Bloomberg View article: http://www.bloomberg.com/news/2012-04-08/economists-have-a-lot-to-learn-from-the-weather.html When I first started studying economics back in college, I was stunned: all consumers perfectly rational? Free markets always lead to maximization of utility? It was in a stark contrast to what I have experienced as someone who saw Soviet Union collapse and embrace the free market theology to the extreme. So I asked my professors: how could something this unrealistic explain all the complexity that actually exists? They told me you had to start with some assumptions to see the gist of it, but you can then relax them to arrive to the more realistic ones. To the best of my knowledge, a model that would really explain the real world of economics is still to be developed. But that doesn't seem to bother most of the economists. Neoliberalism (criticized by some bright minds, Joseph Stiglizt one of them) feels more like a religion than a science. Believed...
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[FT Article] Few FoHFs yield value, report says

The article in FT titled  Few FoHFs yield value, report says  claims fund of hedge funds are largely equivalent to a random selection of a basket of hedge funds, and fail to generate alpha on the fee-adjusted basis. Maybe. But they do all the dirty work on monitoring, re-balancing and (only the better ones) keeping investors money away from fraud. Whether this deserves 1% of management fees and 10% incentive fees, is indeed subject to debate, but I do believe Fund of Hedge Funds have their own merit. Plus, the paper (of which original could not be obtained) apparently uses hedge fund indices for the analysis. I am sure most people are aware of how flawed these metrics are. Borrowing some statisticians parlance, this "fails to reject the hypothesis" of FoHF value added "within the confidence interval", in my humble opinion. On the other hand, not every Fund of Hedge Funds deserves high praise, with that I wholeheartedly agree. ■
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