Thursday, July 14, 2016

Presentation Tips for Young (and Not so Young) Minds

I'm in Korea teaching a summer course at SKKU in Korea. Today students are presenting their company valuations about a companies from all over the world.

As presentations varied, here are some general tips I have from observing quite a few presentations in these years(and trying to improve my own!)

1) Don't read from a script. Try to make your presentation as natural as you can.

2) Practice! Presenting is never easy, but the more you doubt the better you become.

3) Don't try to copy other people's presentation styles. Find your own!

4) When presenting numbers, don't use more than two (maybe even not more than  one) decimal! It makes things easier to read and no one really think that discount rate of 9.3245% is better than 9.3%.

5) Look at the audience as you present. This is a great way to engage with everyone and keep them focused on your talk and relaxed. Remember not to look at the same person too much.

6) Don't make your audience tired by spending too much time talking about details/numbers. You will often lose your audience if you start talking too much about calculations, although sometimes in academia people want to see those!

Thursday, June 16, 2016

Equity Lending, Short Sales & Limits to Arbitrage

Wow. Can't believe it's been almost a year since my last post. Need to be more disciplined and write more often to please my 4 readers!

Anyway, this week JBS's Insight has written a story talking about my "Ownership Structure, Limits to Arbitrage and Stock Returns: Evidence from Equity Lending Market"paper (joint work with my amazing co-authors Melissa Porras Prado (Nova SBE) and Jason Sturgess (DePaul)).

Here is the main summary:

“Stocks with lower, more concentrated, short-term, and less passive ownership exhibit lower lending supply, higher costs of shorting, and higher arbitrage risk,” concludes the study of nearly 5,000 US stocks over a four-year period (2006-2010) – forthcoming in the Review of Financial Studies.

In simple terms: suppose that someone told you that a glass is 50 per cent full. While this is relevant information, it also matters whether the glass contains water, milk or wine, its temperature and expiry date. The article examines a wide list of institutional ownership characteristics, and shows that stocks with lower, more concentrated, short-term, and less passive institutional ownership exhibit lower lending supply, higher costs of shorting, and higher arbitrage risk.

Overall, it means that arbitrageurs will face higher costs to trade and more uncertainty when trying to exploit market inefficiencies, which in turn results in both less efficient prices and delays in incorporating pessimistic investors’ opinions.

To download the paper, just click here.