Good News for Value Stocks: Further Evidence on Market Efficiency

This article examines the hypothesis that the superior return to so-called value stocks is the result of expectational errors made by investors. We study stock price reactions around earnings announcements for value and glamour stocks over a 5-year period after portfolio formation. The announcement returns suggest that a significant portion of the return difference between value and glamour stocks is attributable to earnings surprises that are systematically more positive for value stocks. The evidence is inconsistent with a risk-based explanation for the return differential.     

What Works in Securities Laws?

We examine the effect of securities laws on stock market development in 49 countries. We find little evidence that public enforcement benefits stock markets, but strong evidence that laws mandating disclosure and facilitating private enforcement through liability rules benefit stock markets.     

中国农村金融制度演化60年回顾

新中国成立六十年间,中国农村金融制度的变迁是在政府主导下渐进式推进的,演化过程明显具有其它经济制度＂倒逼＂的特性。＂倒逼＂的特征,虽然保证了中央工业化、地方工业化、新农村建设和和谐社会的构建等目标的渐趋实现,确保了社会和国民经济的平稳发展,但对广大农村地区来说,却延缓了农村现代化、市场化的进程,增加了农村金融改革的成本。在今后农村金融制度的变迁中,我们要逐步由政府主导为主转向以市场为主、政府为辅的驱动机制,以克服农村金融制度变迁中的不足,避免出现问题后再治理的机制。     

老年病防治

随着社会老龄化,老年病的防治和医疗保健日益受到重视。老年患者是一个特殊的人群,他们常常存在着脏器功能的退行性改变,导致临床表现症状不典型,因此需要更谨慎的诊治;而且一个患者常常合并多种疾病,要同时服用多种药物,因此还要注意药物的相互作用。     

Expectations and the Cross-Section of Stock Returns

Previous research has shown that stocks with low prices relative to book value, cash flow, earnings, or dividends (that is, value stocks) earn high returns. Value stocks may earn high returns because they are more risky. Alternatively, systematic errors in expectations may explain the high returns earned by value stocks. I test for the existence of systematic errors using survey data on forecasts by stock market analysts. I show that investment strategies that seek to exploit errors in analysts' forecasts earn superior returns because expectations about future growth in earnings are too extreme.     

EU Labour Markets and Monetary Union

How can European labour markets cope with a single currency? The single currency success story is the US, which has maintained low unemployment rates both in the country as a whole and in individual regions. But Richard Jackman and Savvas Savouri argue this has been achieved by massive migration of workers from depressed to prosperous areas. In Europe migration within countries is quite low and between countries essentially non-existent. Thus in Europe, unlike in the US, the adjustment to national or regional labour market shocks will depend on wage flexibility. Unhappily wages in Europe are not very flexible, particularly in conditions of low inflation, and the single currency may make them even less so. The prospect for depressed areas is thus bleak.     

Managerial value diversion and shareholder wealth

The agents to whom shareholders delegate the management of corporateaffairs may transfer value from shareholders to themselves througha variety of mechanisms, such as self-dealing, insider trading,and taking of corporate opportunities. A common view in thelaw and economics literature is that such value diversion doesnot ultimately produce a reduction in shareholder wealth, sincevalue diversion simply substitutes for alternative forms ofcompensation that would otherwise be paid to managers. We questionthis view within its own analytical framework by studying, ina principal-agent model, the effects of allowing value diversionon managerial compensation and effort. We suggest that the standardlaw and economics view of diversion overlooks a significantcost of such behavior. Many common modes of compensation canprovide managers with incentives to enhance shareholder value;replacing such compensation would reduce these incentives. Asa result, even if the consequences of a rule permitting valuediversion can be fully taken into account in setting managerialcompensation, such a rule might still produce a reduction inshareholder wealth - and would not do so only if value diversionwould have some countervailing positive effects (a possibilitywhich our model considers) that are sufficiently significantin size.     

Fear of feedback

Nobody likes performance reviews. Subordinates are terrified they'll hear nothing but criticism. Bosses think their direct reports will respond to even the mildest criticism with anger or tears. The result? Everyone keeps quiet. That's unfortunate, because most people need help figuring out how to improve their performance and advance their careers. This fear of feedback doesn't come into play just during annual reviews. At least half the executives with whom the authors have worked never ask for feedback. Many expect the worst: heated arguments, even threats of dismissal. So rather than seek feedback, people try to guess what their bosses are thinking. Fears and assumptions about feedback often manifest themselves in psychologically maladaptive behaviors such as procrastination, denial, brooding, jealousy, and self-sabotage. But there's hope, say the authors. Those who learn adaptive techniques can free themselves from destructive responses. They'll be able to deal with feedback better if they acknowledge negative emotions, reframe fear and criticism constructively, develop realistic goals, create support systems, and reward themselves for achievements along the way. Once you've begun to alter your maladaptive behaviors, you can begin seeking regular feedback from your boss. The authors take you through four steps for doing just that: self-assessment, external assessment, absorbing the feedback, and taking action toward change. Organizations profit when employees ask for feedback and deal well with criticism. Once people begin to know how they are doing relative to management's priorities, their work becomes better aligned with organizational goals. What's more, they begin to transform a feedback-averse environment into a more honest and open one, in turn improving performance throughout the organization.