Investment Horizon and Composition of Optimal Portofolio: International Evidence

Little attention has been paid in the literature to the impact of different investment horizons on the portfolio compositiondespite its importance to portfolio managers. One exception isthe study by Gunthorpe and Levy (1994) on the U.S. stock market.Our paper extends the same study to the stock markets of Japan,Hong Kong and Korea. Using 40 individual stocks in each market,our results support those of Gunthorpe and Levy (1994) in thatthe composition of an optimal portfolio depends heavily on theinvestment horizon. When the investment horizon lengthens, theproportion of defensive stocks becomes larger while that ofaggressive stocks becomes smaller.     

MARKETS VS. MANAGEMENT: WHAT ‘DRIVES’ PROFITABILITY?

This study addresses the issue of the relative degree of variance in ROA accounted for by industry, corporate, and SBU effects while controlling for the business cycle and the interaction between the business cycle and industry. Two key articles, Schmalensee (1985) and Rumelt (1991), are discussed in detail. Research results on a recent data base (COMPUSTAT), using variance components analysis (VARCOMP) are presented that not only confirm most of the Rumelt (1991) findings, but also suggest the existence of a corporate effect, heretofore undetected.     

Consumer Interest and Health Reform: The Logic of Withdrawal from Managed Competition

We propose six tasks Colston Warne would urge in addressing health care reform: (1) skepticism about advertised claims, (2) independent testing and appraisal, (3) minimizing barriers to consumer access and choice, (4) maximizing quality, (5) evaluation of fairness, and (6) assessing consumer empowerment potential. Such an exercise would likely have led him and should lead us to advocate single-payer health reform. Consumers are the key to breaking through the grid-lock blocking health reform, and single payer is the key for unlocking the democratic dialogue needed for moving forward. Thus we need to stop “fighting over the bill”and instead begin building a better health system.