Fundamental stock analysts covering the insurance industry may be overly influenced by infrequent large scale catastrophes, such as unusually strong hurricanes. It is important for these analysts to be able to put catastrophes in financial perspective in order to set an appropriate fair value on...

Economic value added (EVA) is a well-known and widely used measure of operating performance. Bacidore, Boquist, Milbourn, and Thakor [1997] introduce a modified version of EVA called refined economic val-ue added (REVA). They claim that REVA is theoretically superior to EVA. Actually, EVA is...

Ideally, an index fund should provide the best possible tradeoff between expected return and risk for the investor who has no research advantage. A number of practical problems arise, however, when one attempts to translate this ideal into practice. Even in the absence of a research advantage, a...

An idealized model of the investment process redefines the respective roles of security analysts and portfolio managers, quantifies such concepts as activity and aggressiveness, and explains how the individual analyst's efforts at forecasting returns translate into improved portfolio performance

This article provides empirical support for the theory that closed-end fund discounts reflect expected investment performance. Evidence is presented to explain how equity closed-end fund initial public offerings (IPOs) can sell at a premium when existing funds sell at a discount and why the...

There is some threshold level of competence among multiple active managers above which an inventory fund will be superior to an index fund. When active managers' trades are genuinely valuable, however, a better approach is to treat them as sources of estimates, not transactions, combining...

The authors charge that investment managers overwhelm potential clients with theories and statistical tests that strongly suggest their good past performance was no accident and will continue. They contend that experience suggests otherwise and that both statistics and theory can seem quite...