We analyze different investment strategies by comparing them over a variety of investment horizons. As expected Utility Theory cannot explain the attractiveness of empirically observed strategies, we apply a behavioral approach instead. In particular, we assess attractiveness from the viewpoint of an investor with preferences described by Cumulative Prospect Theory (CPT), currently the most prominent descriptive theory for decision making under uncertainty. A bootstrap technique is applied using historical return data from 1926 to 2008. To allow for variety in investors’ preferences, we conduct several sensitivity analyses and further provide robustness checks for the results. In addition, we analyze the attractiveness of the investment strategies based on a set of experimentally elicited preference parameters.

In 2000 he said the dot-coms would go bust. Internet entrepreneurs scoffed. In 2005, he said the housing boom would cause a recession. Mortgage lenders laughed. They called him "Mr. Bubble." Wouldn't you like to know what Mr. Bubble has to say today?

The federal government will announce as soon as Monday a three-pronged plan to rid the financial system of toxic assets, betting that investors will be attracted to the combination of discount prices and government assistance.

Why do so many investors underestimate risk of catastrophe? That's the question bestselling author, philosopher and investor Nassim Nicholas Taleb has been pondering for most of his professional career. In his 2007 the best seller, The Black Swan, he warned that investors were ignoring the possibility of rare, catastrophic market crashes

Whilst Jason Pontin (Editorial Director of Red Herring) comes down heavily on former Speaker of the House Newt Gingrich whom he says is responsible for legislative changes that would otherwise have prevented scandals like WorldCom from erupting. He says "Here's why. In three specific cases--tort reform, the accounting of options, and the separation of an accounting firm's audit and consulting services--House Republicans successfully sought to block regulation that would have made corporations transparent. Without Newt Gingrich, there would have been no crisis in business and accounting, at least in this form." Christoper Alden, (a founder and editorial advisor of Red Herring)disagrees. In a sharp rebuttal, he maintains that investors can still sue companies and that options are accounted for in the notes to accounts. Regarding the separation of audit firm and consultancy he points out that Andersen was the first to split (creating Accenture) whilst PWC is now splitting the two businesses, so why havent scandals erupted at PWC? Makes for interesting reading.

together with a counterpoint

Mr. Hickel challenges Mainstream Media Bias of "cheerleading stocks and bonds as the best investments period."

"That was just a dream."

"The Service Economy."

"The adage 'buy low sell high' remains the slogan for near term success in this sectoral bull market. That said, the 'buy low' motto threatens to impersonate those speculative forces that helped create the so called 'tech bubble' in the first place; with capital shifting from sector to sector minting paupers in its wake."

"The final bubble to be addressed in a much broader sense as the authors begrudgingly relinquish the mantle of the new era is the existing debt bubble."

"For more than two years now we've been hearing of a "new era" or "new paradigm", how technology (to say nothing of creative financing) has now given us a permanent, recession-free, high growth economy. The author's opinion of the "new era"; it is the product of a psychological shift caused by too much printing of money, and it died with last year's bear market in the NASDAQ. But in one important respect we are in a new era. This new era is characterized by the willingness of the Fed to print whatever money is required, and offer up whatever bailouts are needed, to stave off recession and a correction in excesses of debt, regardless of the moral hazard incurred. Even in the 1920s, the Federal Reserve did initially lean heavily against the developing stock-market bubble (which was privately financed) in the spring of 1929, rather than feeding it, as today's Fed has. And once the 1920s bubble popped, that Fed was (perhaps, too) cautious in easing in the face of what seemed like the beginning of an ordinary recession. There are also a set of great quotes in the second part."

Telecom companies invested heavily and foolishly over the nineties to build networks for the future. They had to, for they were damned if they did and damned if they didn't. They relied on stable revenues from their voice business and on the capital markets to fund the huge investment requirements. The former has collapsed, as has the equity market. The debt load of telecom companies has trebled in the last 3 years. Can telecom companies survive? Read on.

"Will the power of positive thinking driven by the perception of "monetary easing cures all" win the day? Or will the market be dragged down in a negative perceptual spiral of a fundamentally slowing economy and swiftly declining corporate earnings growth? As we are sure you are well aware, these are the forces that will be reconciled in this new era beer market."

"Much like the dotcom and tech bubble deflated as a process as opposed to an event, the deflation of the Greenspan/Fed confidence bubble will most likely play out over time. The clear tightrope the Fed is walking is that of the health of the domestic economy versus the sustainability of foreign capital maintenance and inflow into US dollar denominated assets."

"The 1990's chart of the Nikkei as well as other examples of our markets seen in the 1970's and 1930's suggest that when bubbles pop, the investor mindset needs to change from one of buy and hold to one of trading waves of subsequent optimism and pessimism in the following years. This is the only way money will be made for a time in the years ahead. Be willing to challenge the most solemn beliefs of the consensus."

"Suffice it to say that the foreign investment community has become a very significant player in the arena of US financial assets. A player that could have a severe impact on domestic financial markets with actions taken simply "at the margin". God forbid foreigners decide to dump U.S. financial assets in wholesale fashion. Forget the worst case. They just have to stop buying to create a huge impact. It's actions at the margin that can change the direction of financial markets."

"How does Bob Shiller explain that so many people got caught up in what he now considers a classic bubble. "Everybody knew the old stories about bubbles, but I think most people thought this time was different, that somehow people back then had been crazy and we were not. And then people also said, we have all this technology now, so it won't happen to us. But it did."

"The losers in the debacle of 2000 are part of the capitalist system. So are the winners, who made their money from greater fools."

"Why were people throwing hard-earned money into the ballooning tech stock bubble? The answer: A Wall Street adage is, `People don't buy securities; they are sold to them'. And the bust? At some point, a company's stock price has to be justified by a relationship to its earnings."

"Among the mantras and incantations, no-one bothered to learn instead the Old Tracker's rules. Be the casino, not the punter. Cut your losses before they cut you. Never confuse your timeframes. Never own anything (psychologically at least). If you do it on borrowed money, you're also doing it on borrowed time. Another Era has ended!

"According to the consensus, up until a few months ago, the longest economic expansion on record was humming. Why then have non-performing loans at the biggest institutions almost doubled in a consistently deteriorating fashion over the last four years? What would happen if the US entered a recession?"

"When debt and asset price deflation are put together, there is a potentially geometric spiral of negative financial consequences. In today's world where so much debt or credit has been securitised against the assumption of ever higher asset values, the current financial system would fare very poorly in an environment of asset price deflation."

"Value investing may be back, inverse index funds should be considered and a bond buying opportunity may be at hand."

"A striking graphical comparison of the 2000 Nasdaq bear with the huge Nikkei bear market that started on 1990."

Bruce Bartlett recently lamented in The New York Times that given the current state of economic affairs we need more Keynesian medicine to fix the US economy. According to Bartlett, the core insight of Keynesian economics is that there are very special economic circumstances in which the general rules of economics don’t apply and are in fact counterproductive.

The Warren Buffett quote that comes to mind: "We don't have to be smarter than the rest. We have to be more disciplined than the rest."

In an age of economic policy activism, including widespread quantitative easing and associated purchases of bonds and other assets, it is perhaps easy to forget that foreign exchange intervention has always been and remains an important economic policy tool.

“The trick to creativity, if there is a single useful thing to say about it, is to identify your own peculiar talent and then to settle down to work with it for a good long time.”

Why instilling admiration for hard work rather than raw talent is the key to fostering a well-adjusted mind.

Here is a curated list of multi-disciplinary books that can help fill your brain and a few that might even help you unwind.

Nowadays, many Washington think tanks effectively serve as unregistered lobbyists for corporate donors, and companies strategically contribute to them just as they hire a PR or lobby shop or make campaign donations. And unlike lobbyists and elected officials, think tanks are not subject to financial disclosure requirements, so they reveal their donors only if they choose to.

The tangled web of international organizations that constitutes global governance has become so remote and ineffective that few count on it to deliver results anymore. Now, after decades of turf wars and self-marginalization, international organizations must rally around an increasingly pressing global priority: sustainable urbanization.

In April 2010, the International Monetary Fund’s World Economic Outlook offered an optimistic assessment of the global economy, describing a multi-speed recovery strong enough to support roughly 4.5% annual GDP growth for the foreseeable future – a higher pace than during the bubble years of 2000-2007. But, since then, the IMF has steadily pared its economic projections.

Children are born with an innate number sense — the ability to discriminate quickly between different amounts or numbers of objects, even without counting. And research has shown that children who have a more acute number sense — or Approximate Number System (ANS) — are also better at mathematics.

Is the coming financial collapse going to be inflationary or deflationary?

First, deeply embedded trends demonstrate that, while the European Union is risky in the short term, it will be strong in the medium and long terms. The EU has a powerful logic and purpose in the twenty-first century.

Everyone likes money. Ask people who say they don’t care about money if they’ve ever turned down a raise. Wait for the awkward pause.

America is a rapidly graying society. This demographic trend has been underway for a while — and anticipated for a long while — yet some of its implications are just now coming into focus. Most notably, the aging of America will almost certainly trigger a retirement crisis, with elderly boomers competing for limited financial and medical resources — and working longer just to stay afloat.

Can people be taught to act more altruistically? Newly published research, measuring both brain activity and behavior, suggests the answer just may be yes.

Last week when I arrived to Bangladesh, the immigration officials there were positively ecstatic to see a foreign tourist entering the country.

A psychological bias that illuminates how we negotiate, predict our emotions, agree a price and much more...

About 40 years ago, researchers first began to suspect that we have neurons in our brains called "place cells."

Saturn's biggest moon, Titan, has long intrigued scientists because it is the only other place besides Earth known to have liquid on its surface.

The recent collapse of a garment factory building in Bangladesh, resulting in the death, at latest count, of more than 1,100 workers who were employed there, has led to international outrage not only against the building’s owner but also against the various retailers in the United States and Europe, many of them prominent, that have sold clothing produced in that building. It is demanded that they assume responsibility for working conditions in the factories that supply them and not deal with factories that do not provide safe and humane conditions and pay fair wages.

Investing in a bank used to seem like such a great idea…But then came the crises, the scandals, the closures, not to mention the government bailouts.

Grant thinks the Fed minutes today which turned the stock market lower contained zero pieces of useful information.

The recent controversy over errors in a 2010 paper by the economists Carmen Reinhart and Kenneth Rogoff is a sad commentary on the demands of the 24/7 news cycle and the politically toxic atmosphere surrounding fiscal policy in the United States, Europe, and Japan.

When we asked Bill Gates to curate a list of his favorite talks, his first response was, “There are too many to pick, really.” Here, he's whittled it down to 13 essentials.

It’s not a well-kept secret, either. Just a simple string of characters—maybe six of them if you’re careless, 16 if you’re cautious—that can reveal everything about you.

Microsoft aims to upgrade the software more frequently, about once a year, rather than every two or three years as it’s done in the past, said the people, who asked not to be identified because the product plans are private. The company plans to unveil the first of these updates in 2013, one of the people said.

For the first time, scientists have confirmed that the planet Mercury holds at least 100 billion tons of water ice as well as organic material in permanently shadowed craters at its north pole.

Ed Boyden, an engineer turned neuroscientist, makes tools for brain hackers. In his lab at MIT, he's built a robot that can capture individual neurons and uses light potentially to control major diseases -- all in his quest to 'solve the brain'.

In 1870, German chemist Erich von Wolf analyzed the iron content of green vegetables and accidentally misplaced a decimal point when transcribing data from his notebook.

The United Nations Environment Program warns that global emissions of greenhouse gases are opening up a widening gap between reality and climate change goals

Thanks to gravitational lensing by a cluster of galaxies, the light emitted by a small galaxy 13.3 billion years ago has reached Earth. John Matson reports

In energy matters, what goes around, comes around—but perhaps should go away

An ambitious plan to provide 15% of Europe's power needs from solar plants in North Africa has run into trouble. The Desertec initiative hoped to deliver electricity from a network of renewable energy sources to Europe via cables under the sea.

Bill Gates in His Own Words readers get a glimpse of the visionary Microsoft co-founder and philanthropist's philosophy on business, technology and life via some of his most memorable quotes

A pioneering European space telescope that discovered the first rocky extrasolar planet is on its last legs, Nature has learned.

A cascade of misfolded proteins may trigger Alzheimer's By Carrie Arnold Researchers have untangled some of the neurological events that may ultimately lead to Alzheimer's disease. Two new studies show that a protein implicated in this form of dementia can infect other neurons to spread disease across the brain. These problematic proteins clump together, which can lead to cognitive problems.

A species of giant tortoises from the Galapagos Islands could be brought back from extinction despite the death earlier this year of the famed "Lonesome George," a tourist magnet and conservation icon who was the last of his kind.

On the heels of a Russian drilling effort that reached Lake Vostok, British and American teams also aim to penetrate ancient subglacial lakes By Quirin Schiermeier and Nature magazine

The report comes by way of the rover’s principal investigator, geologist John Grotzinger of Caltech, who said that Curiosity has uncovered exciting new results from a sample of Martian soil recently scooped up and placed in the Sample Analysis at Mars (SAM) instrument.

The system uses a NeuroSky MindWave Mobile EEG headset to record brainwave data, which is then sent to software on either a tablet/smartphone or on a specially designed pyramid-shaped base. The software converts the brainwave data to flight commands, which control the flight of the spherical helicopter,

In a rare direct photo of a world beyond Earth, astronomers have spotted a planet 13 times more massive than Jupiter, the largest planet in our own solar system.

Human Shares ove 90 % of their DNA with their primate cousins. The expression or activity patterns of genes differ across species in ways that help explain each species' distinct biolgy and behavior.

The random motion of a hydrogen molecule can drive the oscillation of a much larger structure By John Matson

Halloween is a time for sharing ghost stories and watching spooky movies. But have you ever thought about the science behind some of these uncanny experiences? Haunted houses, for example, take advantage of the way your brain uses sensory information.

Rising seas and severe storms are the most talked-about threats of climate change. But here's another: no more coffee. Because rising temperatures may cripple wild populations of Arabica coffee—the most cultivated species in the world.

The notoriously brittle building material may yet stretch instead of breaking

A specialized parasite fungus can control ants' behavior. But that fungus also faces its own deadly, specialized parasites

For every one unit of energy that is converted into electricity in power plants today, two units of energy are thrown away. This wasted energy is primarily in the form of heat – or thermal energy – and, there is technology available today that can turn this waste into a usable energy stream.

This is the first study to examine what factors are associated with an increased follower-count on Twitter over an extended period of time. Hutto et al. (2013) studied 507 Twitter users over 15 months and half-a-million tweets

“Stay glad. Keep hoping machine running. Love everybody. Make up your mind.”

Under Ravi Venkatesan's leadership from 2004 to 2011, Microsoft India's revenues grew fivefold and the country became one of the fastest growing geographies for the software firm.

Ties between the two men go way back. In May 1939, Churchill reviewed Drucker's first major book, The End of Economic Man, for The Times Literary Supplement, praising him as "one of those writers to whom almost anything can be forgiven because he not only has a mind of his own, but has a gift of starting other minds along a stimulating line of thought."

Most people know Peter Drucker through his books and articles. But Drucker was also a great speaker, especially in the classroom, where his students would sit rapt, listening as he pulled facts from his encyclopedic mind and shared insights on countless subjects. This side of the "father of modern management" is captured in The Drucker Lectures, (McGraw-Hill, 2010). Edited by Rick Wartzman, executive director of the Drucker Institute and a columnist for Bloomberg Businessweek, The Drucker Lectures features 33 of his most important talks. The earliest was delivered in 1943. The latest were given at Claremont Graduate University in 2003, two years before Drucker died. The excerpt below, on "The Future of the Corporation," comes from one of those final lectures.

It's a good time to be a corporate gadfly.

So many of the problems we face today result from poor decision-making by private corporations. Prominent examples include the Gulf oil spill and the seriously weakened financial sector, which is imperiling the rest of our economy. However, so many who describe themselves as liberals or progressives seek to address such problems with more government regulation and programs instead of by preventing the bad decisions at the source, which is likely to be more efficient from a resource utilization perspective.

This letter to Occidental Petroleum’s board of directors from Ralph Whitworth of Relational Investors (VII, September 30, 2009) and Anne Sheehan of the California State Teachers’ Retirement System outlines why the activist investors are seeking to replace at least four board members: “[T]he board, as currently composed, suffers from entrenchment and ossification, which renders each of its members incapable of functioning as vigorous and independent shareholder representatives.”

Recently an acquaintance at the next table in a Palo Alto, California, restaurant introduced me to his companions: three young venture capitalists from China. They explained, with visible excitement, that they were touring promising companies in Silicon Valley. I’ve lived in the Valley a long time, and usually when I see how the region has become such a draw for global investments, I feel a little proud.

Power in modern society is progressively being diffused, moving away from central government to interest groups, even to single individuals. Society and the body politic in democratic societies are becoming pluralist in new ways. This phenomenon was analysed by management guru and social science professor Peter Drucker in his book The New Age. A clear understanding of this development would help political and social leaders to cope with changing electoral aspirations.

The Peter F. Drucker and Masatoshi Ito Graduate School of Management was recognized as an “Excellent Business School” by EDUNIVERSAL, an organization that helps students choose the best business schools worldwide. The Drucker school was honored to be among the 1,000 selected business schools in the world because of its strength in the US and international influence.

Peter Senge (born 1947) studied aerospace engineering at Stanford University before moving into the field of organisational behaviour and becoming director of the Centre for Organisational Learning at MIT’s Sloan School of Management. He is credited with developing the idea of the learning organisation, based on his study of social systems and the relationship of the whole to its constituent parts. A learning organisation, he once said, “is continually expanding its capacity to create its future”.

We live in a world of euphemism. Undertakers have become "morticians," press agents are now "public relations counsellors" and janitors have all been transformed into "superintendents." In every walk of life, plain facts have been wrapped in cloudy camouflage.

The influence the CEO has on people--individually and collectively.

I've read about shamrock organisations, horizontal organisations and federal organisations. I've read about intelligent enterprises and spider-web organisations. The most-quoted management guru Peter Drucker said that managing an information-based organisation is more like conducting a symphony orchestra than running a business on traditional lines. Others have compared it to running a jazz combo, and then there are those who say it's like running a sports team.

The bestselling author answers our readers' questions about business, leadership - and mountain climbing.

Think of them as the "walking dead," a type of customer who currently maintains service with a particular company, but whose next action will most likely be to discontinue that relationship, according to a new study that examines how the customers of a telecommunications firm acquire and discard services over time. The paper -- "Modeling the Evolution of Customers' Service Portfolios," by Wharton marketing professors Peter Fader and Eric Bradlow and a former Wharton PhD student -- focuses in part on whether it is possible to predict future purchasing patterns by looking at past buying behavior.

How CEO George Buckley is managing the yin and yang of discipline and imagination

Some shoppers just can't help themselves and buy mostly on impulse without regard to price. Others are die-hard bargain hunters, who only open their wallets for a discount. Then there are the strategic consumers, who are willing to buy full-price sometimes, but at other times they will wait for a bargain. According to new research by Gérard P. Cachon, professor of operations and information management at Wharton, and doctoral student Robert Swinney, it's these customers that retailers need to focus on in order to reap the full benefits of lean retail inventory management and variable pricing.

Few have had as great an impact on the business world as Peter Drucker. So, it is more than fitting to have his work amplified on Branding Strategy Insider during this years Marketers For Charity effort.

Robert Bruner still remembers the first book he read as a manager. It was 1988, and Bruner, now the dean of the Darden School of Business at the University of Virginia, was an up-and-coming professor, respected for his work in finance. But he'd never managed people before. And when he was charged with overseeing the first year of the school's M.B.A. program, Bruner began to struggle.Under fire, Bruner scrambled for guidance. He found it in Peter Drucker'sThe Effective Executive. In the book, published two decades earlier, the dean of management thinkers—known for his study of GM under Alfred Sloan—offered advice to managers burdened with exactly Bruner's problems.

If you own stock in a company that is ripe for takeover, you should hope the company is not acquired by a private equity firm.

Most people assume that good corporate governance benefits shareholders, and that corruption in a banking system should be rooted out. But just how much benefit does a company really get when it improves its accounting and puts a few outsiders on its board of directors? And when does an anti-corruption crusade start to backfire, causing a chilling effect that denies loans to credit-worthy borrowers? India offers a chance to study both questions, which were the subject of papers presented at a global conference on India's Financial System held in April at Wharton. The conference was organized by Wharton's Financial Institutions Center with the Centre for Analytical Finance at the Indian School of Business in Hyderabad and the Stockholm-based Swedish Institute for Financial Research.

While a number of Indian IT companies are expanding globally, several major U.S. IT firms are increasing their presence in India. Among them is Adobe Systems, which views India as an important development center and a growing market for its products. In the second of a two-part interview with Knowledge@Wharton, Adobe president and chief operating officer Shantanu Narayen discusses the company's strategy regarding India and global expansion. In the first part of the interview, published in Knowledge@Wharton, he talks about Adobe's product strategy for the emerging trend of rich Internet applications.

A key element of what has been called "web 2.0" -- along with ideas such as user-generated content and social networks -- is the concept of "rich Internet applications," which use the web as a platform for innovative types of online experiences. A new generation of Internet-connected applications is beginning to emerge led by such companies as Adobe Systems. Knowledge@Wharton recently interviewed Adobe president and COO Shantanu Narayen about the company's latest product introductions. In the second part of this interview, published in India Knowledge@Wharton, Narayen talks about the key role that India will play in the company's global growth strategy.

Hedge Fund Tools offers the only reverse bidding platform for hedge fund services. Hedge Fund Tools expert team helps setting up your hedge fund or for jobs.

Knowledge management systems and knowledge management software for business growth & communication

The website of James O’ Loughlin, author of "The Real Warren Buffett".

The General Center for Internet Services Inc. ( GCIS ) is one of Canada's oldest and largest Internet services provider and e-commerce application developer. Originators of the famous Pagina+ (tm) Search Engine Optimization service, GCIS is in business since 1996.