Subject Areas: Stock pricing. CAPM. Dividend-discount model.Case Setting: January, 1997. US. Equity research.Situation:The case is a rather non-technical introduction to equity analysis and valuation. It portrays the situation of an analyst who, at the beginning of 1997, has to report whether...

I consider in this paper the impact of insider trading regulation (ITR) on a securities market and on social welfare, and suggest that society would be better off if ITR were eliminated. In addition, acknowledging that such an abrupt change in policy is not likely to be made, at least in the...

The failure rate is arguably the variable most widely used in the evaluation of retirement strategies. Its main shortcoming, evaluating how often a strategy fails but not by how much it does, is overcome by shortfall years, which considers precisely this information. The joint use of the failure...

The evaluation of retirement strategies is typically based on the failure rate, although some alternatives have been proposed recently, such as risk-adjusted success (RAS), which aims to capture not just the failure but also the success of the strategies evaluated. The main shortcoming of RAS is...

Standard analysis of retirement strategies involves evaluating their failure rate. One of the shortcomings of this approach is that a strategy may have a low failure rate and at the same time leave large unintended bequests. Maximum withdrawal rates, by definition, exhaust a portfolio by the end...

The relevance of determining how often a retirement strategy failed in the past, and how likely it is to fail in the future, can hardly be overstated. For this reason, the failure rate has become an essential tool when evaluating these strategies. However, this variable is silent about how long...

Warren Buffett has consistently advised investors to follow a simple approach, diversifying broadly and minimizing costs. In fact, he recommended the trustee that will manage his wife's bequest to stick to a simple 90-10 stock-bond portfolio. Is this a sensible strategy for retirees in general?...

Alternatives have become an important asset for institutional investors, and more recently also for individual investors. Many alternatives are easily investable nowadays, and the focus of this article is on two of the most widely used, namely, gold and REITs, representing exposure to...

One of the most important decisions retirees need to make is the asset allocation of their portfolios. They can have a static or a dynamic allocation, and simplicity usually favors the former. Warren Buffett recently added another vote for static allocations by revealing that he had advised a...

All individuals need to decide how much to save during their working years, how much to spend during retirement, and the asset allocation of their portfolio in both periods. A portfolio's exposure to stocks and bonds affects key variables, such as the probability of portfolio failure, the degree...