Honest Numbers about an Amazon Indie Ebook Giveaway

Honest Numbers about an Amazon Indie Ebook Giveaway One problem facing indie authors is the lack of honest sales figures. Self-reporting is often vague or exaggerated. While Hugh Howey’s Author Earnings page is a good source, more data are needed. I recently did a five-day free promotion on Amazon and would like to share my results. I’m writing a series of post-apocalyptic novels titled the Toxic World. Book One, Radio Hope, came out in February. In March I published a 10,000-word short story titled The Scavenger. The series is in the KDP Select program so I can take advantage of free giveaways and countdown deals. The Scavenger is priced at 99 cents. It’s not intended to make money, but to advertise the series, so I use my free days. I get five days to offer it for free every ninety-day period. My first promotion was from Friday, April 4 through Tuesday, April 8. I did little promotion. I mentioned it on my blog and several times on my Twitter feed. Several blogger buddies mentioned it. A few nice people tweeted. Here’s the daily breakdown, with the number of downloads for each country in parentheses. Friday, April 4: US (79), UK (13), Spain (5), Germany (2), Canada (3), India (1). Total: 103. Saturday, April 5: US (82), UK (9), Germany (1), Canada (1), Australia (1). Total: 94. Sunday, April 6: US (58), UK (2), Germany (1), Canada (3), Australia (1). Total: 65. Monday, April 7: US (61), UK (11), Australia (1). Total: 73. Tuesday, April 8: US (47), UK (8), Spain (1). Total: 56. Grand Total: US (327), UK (43), Canada (7), Spain (6), Germany (4), Australia (3), India (1). Grand Total for all markets: 391. The giveaway numbers mirror my sales - the U.S. is My first day was my biggest. Fridays and Saturdays are good sales days as people look for weekend reading. There’s a severe drop off at the beginning of the week. This was reflected in my giveaway numbers. That good first day got me into the top 20 in the Post-Apocalyptic and Dystopian categories on Amazon UK and into the top 20 â€Å"Kindle Short Reads† on Amazon US. This increased visibility and encouraged more downloads, creating a positive feedback loop and getting the attention of some â€Å"free ebook† websites and Twitter feeds, which presumably helped keep numbers up. Reader reaction was prompt. While the giveaway was still on, someone added The Scavenger to Goodreads and I got three reviews. What about sales of Radio Hope? During the giveaway I sold six, twice what I sold in the same five-day period a week earlier. I have since had several sales of Radio Hope to people who said they’d been pulled in So what did I learn? Don’t expect astronomical numbers. As a little-known author in a flooded genre, you won’t hit number one. The friend factor only goes so far. Few downloads were The first day is essential. Getting those numbers up quickly makes you visible. This encourages more downloads that will keep you visible. Weekends are better. Split it across two weekends instead of a single five-day block. You’re building a tower, not launching a rocket. While this giveaway didn’t get me lots of sales, it did get my series onto nearly 400 Kindles. That’s a start.

Enzyme-linked immunosorbent assay Term Paper Example | Topics and Well Written Essays - 2000 words

Enzyme-linked immunosorbent assay - Term Paper Example Most of the time, this waste is hazardous and may cause detrimental effect to any living organisms, including human (Freedman, 3-9). One of the most common environmental toxicant includes the polychlorinated biphenyls or PCBs. PCBs are man-made organic chemicals belonging to a broad family of hydrocarbons. It was used in many industrial and commercial applications because of its good chemical properties like being non-flammable, high boiling point, chemical stability and good electrical insulating properties. These compounds are widely used for many applicants such as transportation and coolants. PCBs are also used as plasticizers in paints, plastics, and rubber products. It was first manufacture during 1929 but their use had been banned in 1979 upon determining its dangerous effects to both the environment and human health (Davis and Wade, 2-6). PCBs have a range of toxicity and vary in consistency from thin, light-colored liquids to yellow or black waxy solids. These toxic compound s are considered to be persistent organic pollutant for it do not degrade easily and may remain for a long time in the environment. PCBs can contaminate some parts of plants and food crops. PCBs may also be taken up into the bodies of small organisms in that lake including fishes. These toxic compounds may bioaccumulate in these food sources and ingestion may have many adverse health effects in human with symptoms such as skin condition or changes in the blood which may lead to liver damage. Some food which contains PCBs can cause poisoning to the consumers. Moreover, some studies report the health effect of PCBs in children of mothers who were exposed to PCBs (ATSDR, 285-290). Hence, it is important to detect this compound in the environment to prevent its hazardous effect. One of these methods of detection includes the use of Enzyme-Linked Immunosorbent Assay or ELISA Analytical Technique Enzyme-linked immunosorbent assay (ELISA) is a biochemical technique which allows rapid scree ning and quantification of an antigen in a sample. It is used mainly to detect the presence of an antibody or an antigen in a sample. The ELISA has been used as a diagnostic tool in medicine and as detection or measuring tool of environmental toxicants. In ELISA, an antigen is affixed to a surface and a specific antibody is applied over the surface so that it can bind to the antigen. This antibody is linked to an enzyme, and in the final step a substance is added that the enzyme can convert to some detectable signal, which is most commonly a color change in a chemical substrate (Lequin, 2415-2416). Enzyme-linked immunosorbent assay or (ELISA) analysis biochemical technique is used to measurement of organic contaminants such as polychlorinated biphenyls in an environmental sample. Performing an ELISA includes at least one or more antibody with specificity for an antigen. The sample, which has unknown amount of antigen, is immobilized on a solid support either non-specifically or spec ifically. The immobilization process occurs in two ways. One process is by the adsorption to the surface wherein a sample containing an antigen is adsorbed into an inert surface, usually a 96-well polystyrene well. Another process involves capturing another antibody specific to the same antigen, as in a "sandwich" ELISA (Lequin, 2417). The detection antibody is added after the antigen is immobilized, forming a complex with the antibody. This is usually done by washing the surface with a solution of a non-specific protein to block proteins

Yellow wall paper Essay Example | Topics and Well Written Essays - 1000 words

Yellow wall paper - Essay Example He impulsively yelled at Mary asking her why she had to tear up the paint, and an argument picked up. Mary was surprised as to why removing paint picture from the wall could get the man so worked up and shaken to the extent of fainting. It did not take long before Jane came in the room, alarmed by the noise. She banged the door shouting while asking, â€Å"May I know what is going on here?† The two just gazed at her; no one gave her an answer. She then turned to Mary whose eyes were already filled up with tears and was reluctant to answer but turned around her head and pointed at the tattered papers of the drawing. Little did Jane; Mary’s sister in-law, started to resolve the situation than they heard Mary scream, â€Å"My baby†¦No...No†¦ No, it cannot be†, and blood was all overfilling the floor. Mary lost her infant, and she was so much in despair not knowing what to do. John, who was astounded, came back into senses and immediately rushed to his wives’ rescue. He hastily called a taxi, sobbing and looking so confused. They slowly took her outside the compound to meet the taxi, and after a short while, it was already there. John, being a doctor, he still could not do anything. He was baffled and could not believe that it was a miscarriage, and he still had hopes that his baby was alive. After the doctor had checked up the wife, the terrible news was delivered; Mary had lost the baby. The report was too much for John to take, and he had to sit down on a bench at the hospital, tears undulating down the cheeks. Jane was left with nothing else to do, but comfort he r brother. The narrator had to spend two nights in the hospital to receive further treatment, and her husband stood up with her, spending all day and night watching over for his beloved wife. It is at this moment that Mary realized that her husband truly loved her. At the same time, John thought of hoe he sometimes mistreated the

Do Nurses' Empathy affect the outcome of care Literature review

Do Nurses' Empathy affect the outcome of care - Literature review Example This section of the research study, will provide a comprehensive understanding with regard to the theoretical aspects of the study with the assistance of various facts, information, as well as opinion gathered from secondary sources such as journals and literatures.Thus, this chapter of the study will provide an in-depth and comprehensive view regarding the role of empathy within the healthcare sector along with improving the outcome of care in healthcare practice. According to Decety (2010), empathy is regarded as the one’s ability to understand and respond to other’s perception through properly understanding what others are thinks and feels. Besides, in the human life empathy plays an important role in providing effective and motivational base to eradicate key issues prevailing within an individual. Similarly, Battarbee & et. al. (2012) affirmed that empathy is the ability to become aware, sensible, understand and sensitive towards other’s feeling, behaviour and attitudes. McColgin (2012) highlighted that empathy is intellectual identification of the situation in the similar manner as other’s are identified. Besides, it can also perceive to be sharing the same set of emotion with different people altogether. Additionally, it has also been affirmed that weather people feel empathy over other or not they all are dependent on different aspects amid each other. The level of empathy differs on the basis of individualâ €™s behaviour and societies. The personal contacts among the people and the experiences that they share among their group are also among the most significant factors that builds empathy among people. Besides, with the advancement and transformation of technology and its impact over different stakeholders has also augmented the importance of the concept of empathy in the real practice, as one’s perception will have immense impact over the others (McColgin, 2012). On the other hand, Decety (2011)

Russias Economy During Yeltsin Era

Russias Economy During Yeltsin Era Analyse the principle problems facing the Russian economy at the end of the Yeltsin era. How have these problems been tackled? Abstract The following dissertation will analyse the principle problems facing the Russian economy at the end of the Yeltsin era. In many respects these principle problems facing the Russian economy stemmed from the economic and political disintegration of the Soviet Union combined with how effectively or ineffectively the Yeltsin administration had attempted to deal with those problems. As will be discussed the principle economic problems that faced the Russian Federation in 1992 were daunting, and therefore it is not surprising that some of these problems remained unsolved and were bequeathed to the incoming Putin government after Yeltsin’s surprise resignation at the end of 1999. Yeltsin had seemed to be Russia’s political saviour in August 1991 when he led the resistance to the attempted coup of Soviet hard-liners against Gorbachev. The failure of that coup inevitably accelerated the demise of the Soviet Union. However, the Russian economy would prove much harder to tackle t han desperate Soviet generals and KGB chiefs.[1] The principle problems of the Russian economy can be arguably traced back to the inefficiencies of the Soviet Union’s command economy and its massive military expenditure during the Cold War. These economic problems accelerated the demise of the Soviet Union itself and made it difficult to make the economic transition to capitalism without major economic implications.[2] The Soviet Union for all its economic faults had at least provided a basic standard of living, which meant that none of its people starved or were in severe economic distress. This was despite a stagnant economy, although its economic stability crumbled with remarkable speed. For much of the Yeltsin era the Russian economy could not match the basic living standards of the old Soviet Union for many of its citizens.[3] It could be argued that the transition to capitalism contributed to the worsening of the principle problems outlined below, and that ill thought out economic policies since have made it more difficult for those problems to be effectively tackled during and after the Yeltsin era. Among the main themes of this dissertation is that the Yeltsin government did not have a consistent set of economic and political policies to solve the principle problems of the Russian economy, which in turn hampered the effective tackling of those problems. The so called young reformers led by Yegor Gaider and Anatoly Chubais had the most thought out strategies for the Russian economy, yet they did not have a constant control over the government’s economic policy throughout the Yeltsin era.[4] Besides not all the economic strategies advocated by the young reformers proved to be effective once the Russian government put those strategies into practice. The ways in which all the principle problems of the Russian economy at the end of the Yeltsin era were all interconnected are arguably obvious and apparent. To a certain extent it will be argued that Boris Yeltsin himself did not help the Russian government to tackle the principle problems of the Russian economy. The link betwee n principle problems in the Russian economy and political ones plus social factors will be discussed when and where appropriate. This dissertation will seek to examine the reasons for the Russian economy taking over a decade to achieve real growth, despite following the policies that it was advised would promote stability, liberalised and privatised economy. This dissertation will attempt to analyse whether the economic transition achieved anything at all to justify an estimated 47 % decrease in living standards between 1991 and 2000. How many Russians believed that the detrimental effects of the principle problems of the Russian economy at the end of the Yeltsin era could have been averted or tackled earlier?[5] When Boris Yeltsin assumed the presidency of the Russian Federation it was still part of the Soviet Union and not even a sovereign state in its own right also it did not have control over economic policy. Yeltsin presided over the dismantling of Communist control in Russia, yet he found it very difficult to construct capitalism from virtually non-existent foundations as any form of capitalist economic activity had been illegal for much of the previous 75 years after the Communist Revolution.[6] By the time Yeltsin left his presidential office, the Russian Federation was a fully independent state that nominally, if not completely become a liberal democracy with a capitalist market economy. However, the dual Russian transitions to liberal democracy and capitalism from an authoritarian Communist State proved difficult and many have argued that those transitions remain incomplete. The incompleteness of the transition to capitalism and the political and economic make up of the Russian fed eration had a strong influence upon the principle problems facing the Russian economy at the end of the Yeltsin era. Russia had been used to authoritarian government with state controlled central planning for the economy so the process of liberalisation had been uneven and had unwelcome social and economic consequences across Russia. The legacy of misguided Soviet economic planning took much effort and a great deal of suffering for the poorest sections of the Russian society to break, it seemed to help a minority of Russians make their fortunes, whilst leaving the rest to fend for themselves. In Russia the correlation between political and economic weaknesses arguably helped to make the post-communist economic and democratic situation imperfect and even corrupt.[7] The move to bring capitalism to Russia in less than a decade was as revolutionary as Stalin’s attempts to achieve industrialisation during collectivisation, yet the opposite aims of privatising the economy. The aim of the Yeltsin government to bring capitalism was a sensible notion, yet the ways that it was implemented caused controversy as well as arguably increasing the impact of the principle problems that afflicted the Russian economy at the end of the Yeltsin era.[8] Decline and signs of recovery 1992 1998 The initial bout of economic shock therapy administered in 1992 brought about hyperinflation, the closure of many factories and enterprises, which led inevitably to mass unemployment. Gaider and the other young reformers in the Yeltsin government had to end state subsidies to factories and intoduce the lifting of price controls at one go rather than to introduce reforms gradually. It was harsh economic medicine for a country burdened with the consequences of communism’s profound economic and political failures, although Yeltsin did not have the political strength or motivation to carry out shock therapy as extensively as Gaider and the other ‘young reformers’ had originally intended. Through much of the 1990s the young reformers and the richest entrepreneurs known as the oligarchs competed for political influence and power, whilst contending to gain control of the Russian economy or a share of its greatest spoils. Neither the young reformers nor the oligarchs were popular with the majority of the Russian people, yet none of them particularly cared. They were not involved in popularity contests, they were arguing over power and riches. Sometimes they might do things that were good for the Russian economy, yet they were mainly interested in achieving their own agendas than serving the national interests of Russia.[9] The weakness of the Russian economy further weakened the position of the Russian government at the start of the Yeltsin era. These were political as well as economic weaknesses that still existed when Yeltsin left office. Yeltsin’s first term was undermined by political disputes with the Russian Supreme Soviet, which Yeltsin eventually closed down and replaced with a new parliament, the Duma. Yeltsin had to maintain his political position whilst attempting to prevent the Communists and nationalists making sufficient electoral gains to restrict his political room to manoeuvre. Yeltsin was able to maintain his hold on power, despite a strong challenge from the Communists after his re-election in 1996. Yeltsin’s second term in office highlighted his inability to find a Prime Minister that was politically reliable, could manage, or even reduce the weakness of the Russian economy and who did not want to assume the presidency as Yeltsin’s replacement before Yeltsin was due to leave office in June 2000. Yeltsin’s second term witnessed his problems with ill health worsen, which in turn meant that the Russian economy as well as the Russian government was not as effectively managed as they needed to be. When Yeltsin appointed the virtually unheard of Vladimir Putin as Prime Minister he believed that he had found a man that could fix the Russian economy and solve its political problems. Perhaps more importantly for Yeltsin and his family, Putin was unwilling to prosecute either him or his relatives for their links to the corruption and inefficiency of the Yeltsin era.[10] The Russian economy did show signs of revival towards the end of Yeltsin’s first presidential term, yet in many respects such a revival was more apparent than real. The vast majority of Russians were economically worse off than they had been before the collapse of the Soviet Union. Declining inflation and unemployment rates did not benefit most of them, especially those that lost their jobs, their savings, and all hope with the shock therapy of 1992 which resulted in inflation rates of around 2,000%. The new Russian economy seemed to benefit former Communist party officials; bureaucrats, factory, and state farm managers that managed to gain control of former state owned enterprises. The other main beneficiaries were the handful of entrepreneurs, subsequently known as the oligarchs that had become very wealthy through their links with Yeltsin. The Russian economy for the first time also had millions of shareholders eager to show their capitalist credentials. The Russian governm ent did not however, share in the beginning of the Russian economy during the middle of the 1990s, the strength and capabilities of the Yeltsin government to deal with economic problems was undermined by falling revenues. Government revenues had been reduced through the economic contraction of the early 1990s, higher spending on social security, lower global prices for Russian oil exports, plus extensive tax evasion. Not that anybody had to deliberately evade paying their taxes given the massive size of the tax arrears owed to the Russian government. The breakdown of the Soviet Union led to other problems such as lower exports to the other former Soviet republics and the inability of countries such as the Ukraine to pay for Russian gas and oil.[11] The table below that shows the annual changes in Russia’s Gross Domestic Product (GDP) figures between 1992 to 1999 amply demonstrates the disastrous state of the Russian economy throughout much of the Yeltsin era. [12] Stock market crash and Government weakness The perilous financial position of the Yeltsin government itself proved to undermine the revival of the Russian economy as it directly contributed to the collapse of the Russian stock market in 1998. The crash of 1998 ruined millions of small-scale shareholders in Russia and reduced the scale of foreign investment in the Russian economy. Russian investors were in effect made to suffer due to the ineptness of the Russian government in raising enough taxes to run the country and avoid bankruptcy.[13] Under Yeltsin the Russian State had lost out in terms of revenue and economic independence to the oligarchs, profits that should have lined the coffers of the Kremlin lined the pockets of Boris Berezovsky, Vladimir Potanin, and the other oligarchs. All of these factors combined to make the insolvency of the Russian State as principle problem of the Russian economy. Restoring the solvency of the government would increase its scope to solve the other principle problems of the Russian economy , as well as restore the political authority of the state.[14] When Vladimir Putin assumed power his government was faced not only with the task of restoring the solvency of the Russian state, he also had to restore the faith of Russians and foreigners that the government would not default on its loans. The crash of August 1998 had led to the Yeltsin government defaulting on $40 billion worth of foreign loans. The crisis in confidence also saw the rouble decline to a third of its pre-crash value.[15] The Russian economy was not helped by international bodies such as the International Monetary Fund (IMF) or foreign governments most notably the United States by the amounts of capital as the Russian government would have liked.[16] As Prime Minister Vladimir Putin had already shown his commitment to restoring the solvency and the power of the Russian State. Putin’s strength of character plus his determination to succeed contributed to Yeltsin’s decision to resign and maximise Putin’s chances of retaining the presidency after the 2000 presidential election. Putin was elected president in 2000 and claimed the credit for Russia’s improving economy as well as apparent victory in the war against Chechen separatists. Putin put himself forward as the man capable of curing Russia’s profound economic, social, and political problems. If confidence alone was the sole key to solving the principle problems of the Russian economy at the end of the Yeltsin era, then Russia should have been a prosperous state the day Putin entered the Kremlin.[17] Principle Problems of the Russian Economy The first principle problem facing the Russian economy at the end of the Yeltsin era was the incomplete nature of the transition to a capitalist market economy. The support of Boris Yeltsin for the measures needed for a full transition to a market economy was not consistent throughout his time in office. The economic reforms introduced in 1992 hit the Russian economy harder than the similar reforms introduced in former Communist states such as Poland and Hungary. Russia had a larger economy, more state enterprises and factories plus a much longer period under communist control than any of the former communist states Central and Eastern Europe had. The Yeltsin government received plenty of advice as to whether to introduce economic liberalisation all at once or gradually, although at that point there was no hard evidence as to which approach would be the most successful in the long run. In the short run economic contraction was expected before the Russian economy would show signs of i mprovement and growth.[18] However, the period of economic contraction was longer than many experts had predicted, although the sheer scale of the problems facing the Russian economy throughout the Yeltsin era were enormous. A healthy Boris Yeltsin, despite his lack of knowledge concerning capitalist economics, might have given the government more urgency in tackling those economic proms it could. However, during his second term as president Yeltsin suffered from the affects of heavy drinking and a severe heart condition. Given the prominence of presidential power in the Russian political system having an incapacitated president was detrimental to the tackling of Russia’s economic problems. Not only was Yeltsin frequently ill he would intervene in the government at some inopportune moments. Yeltsin had a tendency to appoint Prime Ministers and cabinets on a whim. If a Prime Minister proved incapable of tackling the country’s many social, economic, and political problem s they would be removed. Paradoxically if a Prime Minister was too successful in resolving those problems or appeared to be more popular than Yeltsin they were also removed from office.[19] A principle problem facing the Russian economy at the end of the Yeltsin era was that a proper banking system similar to those operating in more established capitalist economies had not been fully developed to aid the Russian economy’s transition in to a capitalist economy. There are various reasons why the lack of a fully developed banking system became a principle problem facing the Russian economy. The lack of such a properly developed and regulated system hindered and deterred foreign businesses from investing in the Russian economy, as potential investors could not be sure of where their money was going. The lack of foreign investment slowed down economic growth in the financial sector of the Russian economy. Growth in the financial sector was needed to compensate for the contractions in the industrial and agricultural sectors of the economy.[20] The lack of a properly regulated banking system also aided the money laundering of illegal profits from the organised crime gan gs that seemed to proliferate after the Soviet Union collapsed. Organised crime gangs had been able to take advantage of the Russian government’s struggle to maintain full political and economic control of Russia. The unregulated nature of the Russian banking system did not help stem the flow of financial capital out of the Russian economy during the Yeltsin era. The Yeltsin government seemed unable or unwilling to take effective measures to stop the flow of capital that was so detrimental to the Russian economy. If the Russian government had been able to attract as much investment into the Russian economy as there was capital exported away from it then the economy would have achieved greater stability and growth. However, the IMF made economic aid and loans to the Russian government conditional upon the Russians on improving the Russian banking system to international standards of performance and regulation. The Russian government could in return claim that Russia’s e conomic problems would have decreased if the Russians had received all the international aid and investments that had been promised in the early 1990s. Whilst aid was slow in coming forward the foreign debts owed by Russia from $97 billion in 1992 to a burdensome $152 billion by 1998. During the same period the amount of GDP the Russian government had to use to service its foreign debts doubled to 60%. That was money that the Russian government could have spent in more productive ways such as increasing spending on non-military research or tackling the social and economic problems that were reducing the performance of the Russian economy.[21] A principle problem facing the Russian economy at the end of the Yeltsin era was organised crime. Organised crime gangs, as previously noted, took advantage of the lack of political and economic control in Russia. The way in which the transition to a capital economy in Russia had been attempted had benefited organised crime gangs. Organised crime had existed in the Soviet Union due to the people wanting consumer goods as well as drugs that were not available through state enterprises. Under the Soviet economy system all private economic activity had been illegal. Organised crime gangs find post-Communist Russia an easy place to operate with little fear of being caught, rival gangs were more of a threat to each other than the Russian police were to them. If the gangs could not bribe the police they could frequently outfight them. The financial dire straits of the Russian government meant that there were not enough police or customs officials to deter, let alone catch organised crime g angs and their members. Poorly or infrequently paid police and customs officials had little motivation in stopping criminals, including those that resisted the temptation to take bribes.[22] Another principle problem facing the Russian economy at the end of the Yeltsin era was the informal economy in which employers paid in cash, whilst neither they or their workers paid taxes on their earnings or profits. However, the informal economy had in many respects helped to maintain the Soviet economy, despite its in efficiencies and stagnation. The economic reforms introduced at the start of the Yeltsin era offered chances and opportunities to organised crime gangs and individual entrepreneurs to make their fortunes. Previous experience of working in the informal economy did prove advantageous to many Russians wanting to make their fortunes or faced with the more mundane task of surviving.[23] The Russians have a long tradition of people who know the right people within the bureaucracy being able to further their own position. Corruption, bribery, and the calling in of favours could make all the difference between success and failure during the Yeltsin era. The informal economy grew due to the greater economic freedom and the unregulated nature of the Russian economy once market liberalisation had occurred. For many Russians being part of the informal economy was the only way to make ends meet. The Russian government had drastically reduced the number of state owned enterprises, whilst cutting subsidies to the newly privatised enterprises. Private enterprises in Russia would frequently not pay their workers for months to try to stay in business as they found it very difficult to survive against foreign competitors. Not being paid for months or only been paid in kind prompted workers further into the informal economy. Due to the lack of money available to the Russian government public sector employees were not always paid either. Desperation forced many Russians into holding two or three jobs to make ends meet. Without the informal economy the social and economic problems facing Russia could have been worse. [24] When private and public sector workers were paid, the high inflation at the beginning of the Yeltsin era meant that most Russians had to find extra sources of income or face economic ruin. It is difficult to have an accurate idea of the informal economy within framework of the Russian economy in terms of its share of GDP and its actual size. Statistics from the Russian government were even in the 1990s domestically or internationally known for their accuracy. Given the lack of resources available to the Russian police, customs officials, and bureaucrats it is not surprising that few people were caught for their involvement within the informal economy or that Russian officials could be bribed to turn a blind eye. During the Yeltsin era, the Russian government estimated that 25% of Russia’s GDP was generated by the informal economy. Other sources such as the IMF and the Russian press put the figure as high as 80%.[25] The harsh economic realities of life in Yeltsin’s Russia meant that corruption and unregulated economic activity increased dramatically. Organised crime gangs were able to gain from people’s misery and desperation in terms of increased levels of drug taking and prostitution. The collapse of Soviet authority and the difficulty of Russia and its neighbours had in securing their mutual borders had given the organised crime gangs the opportunity to expand their activities as well as their profits.[26] These increases in gang activities lead to higher levels of crime, as people had to resort to desperate measures to feed drug habits and gangs fought each other. Although the outbreaks of gang warfare witnessed in cities such as St Petersburg can mainly be regarded as a law and order issue, such events did have an economic impact during the Yeltsin era. Economic hardship, drug taking, and prostitution have heavily contributed to declining life expectancy rates. Many of the peo ple that should be the most economically active in Russia are either working informally and therefore not paying taxes or they have died prematurely. Drug taking and prostitution have increased the spread of AIDS so that Russia has one of the highest infection rates in the world. The demographic decline in Russia, if left unchecked could have major implications for the Russian economy as well as disastrous effects on its society. Organised crime may help many Russians survive from day to day, yet it makes some gang members very wealthy whilst depriving the Russian government of much needed revenue and leaving the cost of sorting out serious law and order as well as health problems. Organised gangs were also able to take advantage of the Russian governments wars in Chechnya during the Yeltsin era by selling drugs and weapons to both Russian troops and Chechen rebel fighters.[27] Overall the effect on the population of the Russian Federation was an average annual decrease in the popul ation of around 750,000 people throughout the entire 1999s.[28] At the end of the Yeltsin era another principle problem facing the Russian economy was the uncompetitiveness of many industries and businesses. Again the legacy of the economic system of the Soviet Union plays its part in the weaknesses of the Russian economy. The Soviet system had not produced words that Russian consumers or potential foreign consumers had wanted. Instead the Soviet economic planners had determined production levels and the types of goods produced. Once state subsidies were removed all factories and enterprises and the Russian economy was open to unrestricted foreign imports. Russian enterprises were forced to close, drastically cut their workforces, or not pay their workers for long periods. Some businesses resorted to not paying their taxes as part of their efforts to stay operative.[29] One of the leading oligarchs, Mikhail Khodorkovsky estimated that upwards of a million Russian enterprises should have been declared bankrupt. In 1996 the Yeltsin government state d that around 35% of Russian factories and businesses were on the verge of bankruptcy. The Russian government estimated that 80% of Russian factories and businesses were in financial dire straits.[30] The instability of the rouble and a lack of foreign currencies and investment also made it difficult for Russian enterprises to remain competitive. De-valuations of the rouble would briefly aid competitiveness, yet did not offer a long-term solution. Lack of foreign investment and profits made it more difficult for Russian factories to replace obsolete equipment or the latest training for their workers. The standard of education in Russia tended to be high, although there was a lack of people trained in Information Technology and more advanced industrial procedures, especially outside of the military research establishment.[31] The Yeltsin government and the young reformers had hoped that large-scale foreign investment would revive even the most outdated enterprises in the Russian econ omy. Although, not all of the potential foreign investors were put of by the lack of market regulation, the less than welcoming reception received from officials, Russian businesses, and the Russian public deterred many investors from investing in Russia.[32] The young reformers had hoped that their policies would only lead to a short-term contraction of the Russian economy, with a more competitive and modernised Russia emerging from shock therapy. They and Yeltsin were caught by surprise when the affect of shock therapy lasted throughout the Yeltsin era. A sharp contraction in the production levels of Russian heavy industries was expected and indeed occurred. However, the biggest falls in production witnessed during the Yeltsin era was in the production of consumer goods rather than in the more traditional heavy industries. Whilst production in those heavy industries of coal, steel, oil and gas declined by 45% during the 1990s that was not as bad as the decline in production of consumer goods. The move to a capitalist market economy had been anticipated to provide stimulation for increases in the production of Russian made consumer goods such as colour television sets, personal computers, and video recorders. Instead production of these consumer items declined dramatically, by 80% for television sets, 60% for personal computers, and 99% for video recorders. A section of the Russian economy that the government had believed would promote economic growth and provide jobs for those that lost their jobs in other sectors of the economy ceased to exist to any meaningful extent. There are two fairly straightforward explanations for the slump in the production of consumer goods. Those Russians that could afford television sets, personal computers, and video recorders brought more reliable and fashionable imported foreign brands. Through the liberalisation of the Russian economy and the efforts of the informal economy such goods became more widely available if not affordable throughout the Yeltsin era. For the poorest sections of Russian society that had their savings wiped out by inflation and their prospects diminished by unemployment or underemployment throughout the Yeltsin era there were little prospects of them buying the essentials to live let alone Russian or non-Russian consumer goods. The poor could not even afford the low quality and cheaper Russian made goods.[33] A principle problem of the Russian economy closely related to its uncompetitiveness was the increasing shortages of workers, skilled ones in particular. At the start of the Yeltsin era the severe contraction of the Russian economy meant that unemployment had increased. It was not only capital that left the Russian economy once the country moved to a market economic system. Some of the brightest and most capable people working in the Russian economy left the country for better pay and prospects abroad. Of course, not everybody was able to take the opportunity to earn his or her future in exile. In some respects the most harm done to the Russian economy was by the calibre of academics and technicians that left the country. The Yeltsin government could not do as much to halt the brain drain as it had to cut spending on higher education, health services and most notably on defence projects and research. Cuts in defence spending could be justified, as a war with the United States and its NATO allies seemed impossible. The shortage of skilled workers was worsened by the reduction in life expectancy, especially amongst men. The effects of lower life expectancy were mult

Human Cloning - Up to the Individual :: Argumentative Persuasive Topics

Human Cloning - Up to the Individual To consider the cloning of another human being forces me to question the very concepts of right and wrong that make us all human. Until the birth of Dolly the sheep, the first mammal to be successfully cloned, it was thought that the ability to clone an adult human was impossible or would only be possible somewhere in the distant future! But that has all changed with the birth of Dolly and the explosion of advances in the field of Embryology and genetic screening. These advances are leading the way forward for the cloning of an adult human, which brings up many new ethical and complicated questions that I feel must be addressed by the scientific community and the public, before these advances can reach there full potential. As with any scientific or technological advance, it brings around questions that I feel must be answered: Do the pros out weight the advantages, and more importantly; is it right? Will Human Cloning become a brave new step in fighting disease and improving the quality of life, or will it lead to dehumanisation and a new genetic underclass? People say and strongly believe that biologists are cloning human embryos only to see how far they can push the scientific barriers. However not all things are corrupt, I believe, as do the leaders of Great Britain, that it is possible that the reasons behind Human Cloning, Embryology and genetic screening may be legitimate. Cloning could help improve the life of future generations. Although I still prefer the idea of these scientists spending all this money and their effort on finding a cure for a disease that has or will affect many of us in one way or another: cancer! I still keep an open mind about this subject as most of the embryologists and biologist's claim that they are doing this as they feel that they have a duty to the improvement of our society, or even perhaps a moral obligation. To this end the techniques have been offered to society as an option for the improvement of humanity. The human race is in the early stages of defining human cloning and what it means. The huma n race is defining it as a science as opposed to an art or religion, specifically a kind of science that is called Biotechnology. Biotechnology is the study into the design and manufacture of the human body.

Efficient Market Hypothesis and Behavioral Finance †Is a Compromise in Sight

Legend has it that once upon the time two economists were walking together when one of them saw something that struck his mind. â€Å"Look,† he exclaimed, â€Å"here’s a great research topic! † â€Å"Nonsense,† the other one said, â€Å"If it were, someone would have written a paper on it by now. † For a long time this attitude governed the view of economists toward the stock market. Economists simply believed that the stock market was not a proper subject for serious study.Indeed, most of the pre-1960 research on security prices was actually done by statisticians. The Pre-History: Statistical Research Most of the early statistical research of the stock market concentrated around the same question: are security prices serially correlated? Do security prices follow a random walk? Are prices on any given day as likely to go up as they are to go down? A number of studies concluded that successive daily changes in stock prices are mostly independent. Th ere seemed to be no pattern that could predict the future direction of price movements.One of the most interesting (and currently relevant) research projects of that earlier era was undertaken by Harry Roberts, a statistician at the University of Chicago. In his paper, â€Å"Stock Market ‘Patterns’ and Financial Analysis,† published in the Journal of Finance in 1959, Roberts wrote: If the stock market behaved like a mechanically imperfect roulette wheel, people would notice the imperfections and, by acting on them, remove them. This rationale is appealing, if for no other reason than its value as counterweight to the popular view of stock market â€Å"irrationality,† but it is obviously incomplete.Roberts generated a series of random numbers and plotted the results to see whether any patterns that were known to technical analysts would be visible. Figure 1 provides an example of Roberts’ plot: Efficient Market Hypothesis And Behavioral Financeâ€⠀Is A Compromise In Sight? Figure 1. Simulated stock price path Those somewhat acquainted with technical patterns might recognize a familiar head and shoulders formation, which technical analysts believe to be one of the surest indicators of a trend reversal. At this point, the reader may take pause. Are these stock price patterns of value or not?If they work even on decidedly random series, isn’t there a contradiction? Maybe not. Consider a hypothetical example of a stock price path in Figure 2. If tomorrow the price of this stock goes down, there will be a clearly visible head and shoulders pattern, which should signal a trend reversal. If, however, the price goes up, the resulting formation will look more like a pennant pattern, which, according to market technicians, signals the renewal of the trend. In other words, technical patterns are easy to see only when it is too late to act on them. P P t Figure 2. Hypothetical example of technical patterns formation tToday, anyo ne can replicate Roberts’ results using a common spreadsheet program. In his popular textbook, Financial Modeling, Simon Benninga of the Wharton Business School devotes an entire chapter to simulating stock price paths using Microsoft Excel. 2 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Returning to Harry Roberts, his paper turned out to be almost prophetic in one major respect. He wrote: Perhaps the traditional academic suspicion about the stock market as an object of scholarly research will be overcome. As we shall see during the rest of this presentation, Roberts was right.The Pre-History: CRSP Another enabling factor for the soon-to-follow boom in stock market research was provided by an initially small outfit based at the University of Chicago, the Center for Research in Securities Prices (CRSP). CRSP was established by James H. Lorie in 1960 and provided comprehensive data on all stocks traded on the New York Stock Exchange since 1926. From day one, CRSP data were available in machine-readable form, a rare and pleasant occurrence to anyone involved in economic research at the time. Also important is the fact that CRSP data contained a negligibly small number of errors.Overall, CRSP database was one of the richest data sets available. Everything was ready for a revolution. Indeed, the revolution was soon to begin. The Origin of the Efficient Market Hypothesis The introduction of the term â€Å"efficient market† is usually attributed to Eugene Fama. In his 1965 paper, â€Å"Random Walks in Stock Market Prices,† published in the Financial Analysts Journal, Fama cites, among other things, his earlier study of serial correlations in daily price changes of 30 stocks that comprise the Dow Jones Industrial Average index (â€Å"The Behavior of Stock Market Prices†).He concluded that daily changes had a very small positive correlation, approaching zero for practical purposes. The stock market seem ed to work in a way that allowed all information reflected in past prices to be incorporated into the current price. In other words, the market efficiently processed the information contained in past prices. Fama defined an efficient market as: a market where there are large numbers of rational profit maximizers actively competing, with each trying to predict future market values of individual securities, and where important current information is almost freely available to all participants. Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Note that this description is very similar to that of a perfectly competitive market out of a microeconomics textbook. And in a perfectly competitive market, every seller earns a normal profit, i. e. , the amount of profit sufficient to stay in business, but insufficient to attract a competitor. If we assume that this is true of the stock market, it follows that any new information that becomes available to the m arket will be very quickly reflected in the prices.Otherwise, there will be opportunities for abnormal returns. In Fama’s own words, In an efficient market, on the average, competition will cause the full effects of new information on intrinsic values to be reflected â€Å"instantaneously† in actual prices. The efficient market hypothesis has been formulated. The time has come to test it. Tests of Market Efficiency in the 1960s A number of different approaches were used to test the efficient market hypothesis. One of the most obvious ones was to do more studies on serial correlation of security prices.A variation of this approach would be to test various trading strategies recommended by technical analysts to see if they have any investment value. Both have been tried, and invariably came back with mostly negative results. An interesting area of research dealt with the nature of return distributions. There are some clearly visible asymmetries in stock returns. If we lo ok at the ten biggest one-day movements in S&P 500 index since 1947, nine of them would be declines. The market crash of October 1987 resulted in a negative return that was 20 standard deviations away from the mean.It turned out that stock returns are not normally distributed. They follow some sort of distribution, but, to our knowledge, no one has figured out what kind of distribution it is. On several occasions, stable Paretian distribution and Student t-distribution were found to be better approximations than the normal distribution. Needless to say, this poses a huge methodological problem for researchers who, for lack of a better assumption, are still assuming normal distributions for drawing statistical inferences. An important breakthrough in testing market efficiency came with the advent of the â€Å"event study† methodology.In an event study, researchers take a sample of similar events that occurred in different companies at different times and determine how, on aver age, this event impacted the stock price. And what would a researcher expect to see as the outcome of an event study? Assuming that we are studying favorable events, the outcome would depend on whether or not the event is anticipated by the market and, of course, on whether or not the market is efficient. In all cases, we would expect the stock price to go up. The question is, when? 4Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Consider an unanticipated event first. If the market were efficient, the stock price would adjust upward very quickly. If not efficient, it will drift upward for some time following the event (see Figure 3). P Efficient Market P Inefficient Market Event Time t Event Time t Figure 3. Market reaction to an unanticipated favorable event If the event were anticipated, the price would drift upward for some time before the event, and, in an efficient market, likely stabilize on the event date (see Figure 4). PEfficient Market P Inefficient Market Event Time t Event Time t Figure 4. Market reaction to an anticipated favorable event The first event study was designed and conducted by Eugene Fama, Lawrence Fisher, Michael Jensen, and Richard Roll. Their article, â€Å"The Adjustment of Stock Prices to New Information,† was published in the International Economic Review in 1969 and quickly earned itself a nickname, â€Å"the FFJR study. † FFJR studied the stock market reaction to announcements of stock splits. Typically, stock splits are believed to be seemingly inexplicable good news for investors.One possible reason was reported by FFJR themselves: they found that 72% of firms in their sample announced above-average dividend increases in the year after the split. Stock splits seemed to â€Å"signal† future dividend increases. (Actually, the term â€Å"signaling† was proposed in the early 1970s by Michael Spence, who won the 2001 Nobel prize for, among other things, his research on signaling in labor markets. ) 5 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? What FFJR found is that, on average, stock prices around the date of the split behaved as shown in Figure 5. Figure 5.Averaged stock price performance around the split date According to FFJR findings, the market begins to anticipate a stock split more than two years before it actually happens and figures out the consequences of the split the day it is announced. The event study techniques were further refined by other researchers. Some of the research designs are quite clever. A bizarre example appeared in a 1985 article in the Journal of Accounting and Economics by Johnson, Magee, Nagarajan, and Newman. The title of the article, â€Å"An Analysis of the Stock Price Reaction to Sudden Executive Deaths,† is self-explaining.The authors found that unexpected CEO deaths are associated with stock price decreases. However, in cases when the CEO was the company foun der, the stock market tends to react by a price increase, begging the inference that the ability to create a business is different from the ability to run one. The efficacy of professional investors is another enduring question. Can they, on average, provide better investment performance? The research here was focused primarily on mutual funds. Regrettably, most professional money managers are not able to provide superior returns.By 1975, the preponderance of evidence argued that markets were efficient. Statistical studies showed that technical analysis did not add value (consistent with the weak form of market efficiency). Event studies found that the market quickly reacts to new information (consistent with the semi-strong form of market efficiency). And studies of professional investors’ performance made a strong case for the strong form market efficiency. Tests of Market Efficiency after 1975 As more and more researchers tested the efficient market hypothesis, some rather controversial evidence began to appear. Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? In 1976, Rozeff and Kinney published their article on stock market seasonality. They found that January stock returns were higher than in any other month. In 1981, Gibbons and Hess reported â€Å"the Monday effect† – stock prices tended to go down on Mondays. Both of these findings were clearly inconsistent with the weak-form market efficiency. Interestingly enough, Gibbons and Hess noticed that the Monday effect seemed to decrease over time (see Figure 6).Figure 6. The Monday effect In the nine-year period of 1962-1970, the S&P 500 returned about -0. 16% on an average Monday. In the following nine-year period, 1970-1978, the S&P 500 would only drop by 0. 10% on average. It appears that the effect has been known to some market participants for a while, and they were taking advantage of this private information, which, in turn, caused their gains to decrease over time. A growing body of research indicated that profitable selection rules could be based on publicly available information.In particular, stocks with low price-earnings ratio and high dividend yield outperformed the market. And, while small capitalization stocks have a greater risk than large-cap stocks, the return premium seemed to be too large for the degree of additional risk taken. The discovery of these and other â€Å"market anomalies† prompted the editorial board of the Journal of Financial Economics to publish a special issue in June 1978 on a dozen of those market anomalies. An unexpected blow to the efficient market hypothesis came from academic economists.In 1980, Sanford Grossman and Joseph Stiglitz published their article â€Å"On the Impossibility of Informationally Efficient Markets† in the American Economic Review. They argued that if all relevant information were reflected in market prices, market agents would have no incentive to acq uire the information on which prices are based. This line of reasoning came to be known as Grossman-Stiglitz paradox and, along with his other contributions, earned Joseph Stiglitz his Nobel prize in 2001. The empirical research, of course, did not stop there. 7Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? In 1981, Henry Oppenheimer tested stock selection criteria developed by Benjamin Graham. Most of us probably know Ben Graham as the author of the classic, Security Analysis, but he also wrote another, somewhat less technical, book, called The Intelligent Investor. In each new edition of the book, Graham updated his investment advice to his readers, whom he called â€Å"defensive investors†. Oppenheimer back-tested this advice as if he purchased every edition of The Intelligent Investor and acted on it after reading it.It turned out that Graham’s advice did have significant value. Moreover, it actually had more value than Graham h imself claimed. In 1982, Rendelman, Jones, and Latane published their article, â€Å"Empirical Anomalies Based on Unexpected Earnings and the Importance of the Risk Adjustments,† in the Journal of Financial Economics. They studied earnings surprises and their effect on the stock price. They divided their sample into ten categories (deciles in statistical parlance) according to how positive or negative the earnings surprise was.Then they calculated averaged price paths for stocks in each decile. Figure 7 presents a summary of their findings. Figure 7. Stock price paths around earnings announcement by decile While the market did react to earnings surprises quickly, the prices also drifted in the direction of the earnings surprise following the announcement. In other words, the market commonly underreacts to the quarterly earnings announcements. This suggests the validity of an â€Å"earnings momentum† strategy (buying stocks that just had a positive earnings surprise).A number of later studies produced results consistent with this thinking. However, in a somewhat puzzling twist, there were studies which suggested that the stock market actually overreacts to certain announcements. In 1981, Robert Shiller published his article, â€Å"Do Stock Prices Move Too Much to Be Justified by Subsequent Changes in Dividends? † in the American Economic Review and concluded that they do. This phenomenon came to be known as â€Å"excess volatility†. 8 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?In 1985, Werner De Bondt and Richard Thaler published their article, â€Å"Does the Stock Market Overreact? † in the Journal of Finance. Their conclusion was that the stock market tends to overreact to long series of bad news. So by 1985, there were enough anomalies discovered to seriously doubt the validity of the efficient market hypothesis. Reconciling the Theory and the Reality This is a good point at which to consider the efficient market hypothesis and identify those assumptions that may be inconsistent with reality as we know it.First of all, as ironic as it sounds, there is no way to test market efficiency per se. We can only test a joint hypothesis stating that, first, the market is efficient in equating asset prices with their intrinsic values, and, second, we know what the intrinsic values are; i. e. , we have a perfect asset pricing model. Whenever an anomaly is found, we don’t know (and have no way of knowing) which part of this joint hypothesis did not work. Returning to Fama’s definition of an efficient market, he assumes that important current information is almost freely available to all participants.This appears to be an accurate assumption; however, both the processing of this information and the subsequent action have associated costs. An institutional investor must hire security analysts and portfolio managers. Even an individual investor faces an opportunit y cost with every portfolio evaluation. Both face transactional costs; large portfolios, in addition, may be subject to additional costs caused by market impact. The transactional cost considerations prompted Michael Jensen to argue that an efficient market should adjust prices within limits imposed by the cost of trading.In his 1978 paper, â€Å"Some Anomalous Evidence Regarding Market Efficiency,† published in the Journal of Financial Economics, he insisted that if, for example, transactional costs are 1%, an abnormal return of 1% must be considered within the bounds of efficiency. Indeed, if inefficiency cannot be exploited for profit net of costs, is the market really inefficient? This, of course, begs a question: what is the level of transactional costs at which we can no longer call a market efficient in spite of its being within the bounds of efficiency?There may also be some effects caused by the way security prices are reported (market microstructure effects, in the financial economics lingo). A typical research assumption has been that trades can be executed at the closing price as recorded by a data provider such as CRSP. However, the average NYSE-AMEX stock has a quoted bid-ask spread of about 3%. For NYSE-AMEX stocks priced under $5, the average spread is about 6%. In addition, sometimes it is impossible to execute at quoted spreads because of illiquidity or market impact. 9 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?In fact, Donald Keim used precisely this argument to explain â€Å"the January effect. † In his 1989 paper, â€Å"Trading Patterns, Bid-Ask Spreads, and Estimated Security Returns,† published in the Journal of Financial Economics, he reported that stocks tend to close near the bid in late December, but close prices move toward the ask in early January (although we still have to come up with the explanation of why it happens). Also, there is a short-selling issue. In an effic ient market, short sales are unrestricted. In reality, 70% of mutual funds state in their prospectus that they will never engage in a short sale.Interestingly enough, recent empirical evidence seems to suggest that, while undervalued investments are hard to come by, overvalued ones are much more common. For example, a 1999 article by Mark Finn, Russell Fuller, and John Kling, â€Å"Equity Mispricing: It’s Mostly on the Short Side,† in the Financial Analysts Journal concludes that in 1983-1998 overvalued large-cap U. S. stocks tended to be overpriced by as much as four times the amount of underpricing observed in undervalued large-cap U. S. stocks. Finally, there is the unavoidable issue of investor heterogeneity. Investors are not identical.Even if they have precisely the same information available to them, they are likely to interpret it differently. More importantly, they tend to act on it differently. One obvious example is tax status. Tax-exempt, tax-deferred, and taxable investors acting rationally will often choose different courses of action when presented with the same problem. Liquidity needs can also play a role. Speaking more broadly, is Fama-style rational profit maximizing the only possible model of investor behavior? Are there other models? This, of course, leads us straight into the brave new world of behavioral finance.An Alternative Behavioral Model? Since the early 1980s, there has been a movement toward incorporating more behavioral science into finance. The proponents of behavioral finance cite several key areas where the reality seems to be most at odds with the efficient market hypothesis. One is the excess volatility problem that we discussed above. Price movements seem to be much greater than an efficient market would allow. A related puzzle is that of trading volume. If everyone knows that everyone (including themself) is rational, then every trader might wonder what information the seller has that the buyer doesn’ t, and vice versa.Figuring out exactly how little trading should be occurring under the efficient market hypothesis is difficult, because people have liquidity and rebalancing needs, but the proponents of behavioral finance believe it is safe to say that a billion or so shares a day on NYSE alone is a little more than one should expect in an efficient market. 10 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Next is the great dividend puzzle. In a perfect world according to Modigliani and Miller, investors should be indifferent between dividends and capital gains.In the real world, because of the structure of the U. S. tax system, investors should prefer capital gains to dividends, and companies should prefer share repurchases to dividends. At the same time, most large companies do pay dividends. In addition, stock prices tend to rise when dividends are increased or initiated. The current literature treats dividends as yet another instance of sig naling—companies that increase or initiate dividends send a signal of their financial health to the investors. Another puzzle is that of the equity premium.Historically, this benefit has been much greater than can be explained by risk alone. (To the defense of the efficient market hypothesis, the equity premium implied in dividend yields tends to be significantly lower. ) Finally, it seems that future returns can, at least partially, be predicted on the basis of various historic measures such as price-earnings and price-to-book ratios, earnings surprises, dividend changes, or share repurchases. However, in spite of all these irregularities, real-world portfolio managers are still having a hard time trying to beat the market.Most of the studies of mutual funds and pension fund performance still show that, on average, active managers do no better than the market. Moreover, good performance this year consistently fails to predict good performance next year. With this in mind, le t's examine the case for behavioral finance. First of all, what is behavioral finance? In short, it postulates that investors have cognitive biases. What is a cognitive bias? Simply put, it is an imperfection in human perception of reality. (Have you ever noticed how much bigger the moon looks when it is just above the horizon compared to when it is high? Here are a few of the most common cognitive biases in finance. Mental accounting. It seems that the majority of people perceive a dividend dollar differently from a capital gains dollar. Dividends are perceived as an addition to disposable income; capital gains usually are not. Biased expectations. People tend to be overconfident in their predictions of the future. If security analysts believe with an 80% confidence that a certain stock will go up, they are right about 40% of the time. Between 1973 and 1990, earnings forecast errors have been anywhere between 25% and 65% of actual earnings.Reference dependence. Investment decisions seem to be affected by an investor’s reference point. If a certain stock was once trading for $20, then dropped to $5 and finally recovered to $10, the investor’s propensity to increase holdings of this stock will depend on whether the previous purchase was made at $20 or $5. 11 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? Representativeness heuristic. In cognitive psychology this term means simply that people tend to judge â€Å"Event A† to be more probable than â€Å"Event B† when A appears more representative than B.In finance, the most common instance of representativeness heuristic is that investors mistake good companies for good stocks. Good companies are well-known and in most cases fairly valued. Their stocks, therefore, may not have a significant upside potential. One of the most peculiar manifestations of cognitive biases in finance is the reluctance to realize losses. Investors seem to have a problem adm itting to themselves that they have made a mistake and avoid selling securities at a loss, even though such sale has some tax incentives.Now, what are the implications of behavioral finance for the markets? In his 1999 article, â€Å"The End of Behavioral Finance,† published in the Financial Analysts Journal, Richard Thaler offers this simple model: Suppose a market has two kinds of investors: rational investors (rationals), who behave like agents in economics textbooks, and quasi-rational investors (quasi’s), people who are trying to make good investment decisions but make predictable mistakes. Suppose also that two assets in this market, X and Y, are objectively worth the same amount but cannot be transformed from one into the other.Finally, assume that the quasi’s think X is worth more than Y, an opinion that could change (quasi’s often change their minds) while rationals know that X and Y are worth the same. What conditions are necessary to assure tha t the prices of X and Y will be the same, as they would be in a world with only rational investors? This question is complex, but some of the essential conditions are the following. First, in dollar-weighted terms, such a market cannot have too many quasi’s (in order for the rational investor to be marginal).Second, the market must allow costless short selling (so that if prices get too high, the rationals can drive them down). Third, only rational investors can sell short; otherwise, the quasi’s will short Y when the two prices are the same because they believe X is worth more than Y. Fourth, at some date T, the true relationship between X and Y must become clear to all investors. Fifth, the rationals must have long horizons, long enough to include date T. These conditions are tough to meet.Thaler seems to suggest that the belief by quasi-rational investors that certain assets are undervalued may lead to an asset bubble, which will burst as soon as quasi-rational inve stors sentiment changes. (Did somebody say Internet? ) Why is behavioral finance important? 12 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? As most marketers know, any product has its unique set of utilitarian and valueexpressive characteristics. The value-expressive characteristics are the most visible in jewelry and almost absent in laundry detergents.An interesting question to ask, then, is, do investments have value-expressive characteristics? If they do, we should not be surprised that pricing differences exist between otherwise identical investments, based entirely on their value-expressive characteristics. A casual look at stock exchange advertisements suggests a positive answer to this question. The NYSE promotes itself as solid, while NASDAQ claims it is innovative. A review of mutual funds marketing can also give us a few insights. In 1983, Fidelity Investments put Charles Jarvie in charge of marketing its mutual funds.Prior to joinin g Fidelity, Jarvie marketed Tide and Pringles at Procter ; Gamble. Jarvie immediately noticed two deficiencies in Fidelity’s marketing. Fidelity’s flagship product, the Magellan fund, was not advertised as Fidelity Magellan; the company was underemphasizing its brand name. Also, almost no attention was paid to cross-selling. Under Jarvie’s leadership, Fidelity redefined itself as a â€Å"family of funds† and built itself one of the strongest brands in the financial services industry. Other mutual fund companies followed quickly.Even more interesting are the studies of investment clubs. Over 35,000 of these clubs exist in the United States. An investment club usually includes 10-15 members (friends, co-workers, or relatives) who, on average, contribute $25 a month to the club’s account. In 1998, Brad Barber and Terrance Odean of the University of California at Davis studied performance of 166 investment clubs that had accounts with a large brokerage firm and found that 60% of the clubs lagged the market. The average underperformance was 3. 8% a year. So it seems that investment clubs lack utilitarian characteristics.What about value-expressive ones? Also in 1998, Brooke Harrington of Harvard University studied the identity formation in investment clubs. Her sample included three clubs: an all-men’s club where all members were sports car hobbyists, an all-women’s club where all members belonged to the American Association of University Women, and a mixed-gender club where all members met each other through a church singles group. She concluded that investment clubs are also social clubs. In terms of our marketing approach, they do have strong value-expressive characteristics.The importance of behavioral finance and its role in the professional’s decision making process appears self-evident. While it may fail to enhance our capacity to beat the market, it can help us understand the beliefs and motivations of our clients and improve the service provided. Is a Compromise in Sight? Are the differences between traditional finance and behavioral finance irreconcilable? Recent literature suggest a negative answer to this question. 13 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? One the one hand, the sensible proponents of behavioral finance recognize the limitations of this approach.Meir Statman of Santa Clara University said it best: Market efficiency has two meanings. To some, market efficiency means that there is no systematic way to beat the market. To others, it means that security prices are rational – that is, reflect only â€Å"fundamental† or â€Å"utilitarian† characteristics, such as risk, but not â€Å"psychological† or â€Å"value-expressive† characteristics, such as sentiment†¦ I argue that finance scholars and professionals would do well to accept market efficiency in the beat-the-market sense, but reject it in the rational-pricing sense.On the other hand, the standard finance begins to produce some research that models effects of opinion differences. Earlier, we talked about the seemingly excessive trading volumes. It appears that trading volume varies directly with the difference in investors’ opinions. Figure 8 provides a simple Marshallian cross analysis of a widening difference in opinions. Both supply and demand for a particular security shift to the right as both number of buyers and number of sellers increase.While the effect on price cannot be determined without additional information such as relative magnitude of shifts in supply and demand, the volume is bound to increase. P (price) S S’ D D’ Q0 Q1 Q (volume) Figure 8. Opinion difference and trading volume An interesting thing to discuss here would be the work of Joseph Chen and Harrison Hong of Stanford University and Jeremy Stein of Harvard Business School. In their 1999 paper, â€Å"Differen ces of Opinion, Rational Arbitrage and Market Crashes,† Hong and Stein propose the following model. 14 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight?There are two investors, A and B, and a class of fully rational, risk-neutral arbitrageurs. A and B each receive a different private signal affecting their rational perception of the value of the same stock. Both signals are useful, but A only pays attention to his signal, even if that of B is revealed to him, and vice versa. Arbitrageurs, on the other hand, recognize that the best estimate of the stock’s value is to be found by averaging both signals. However, if A and B face short sale constraints and the signals they receive are negative, the arbitrageurs simply will not see those signals.In other words, the negative private information will not have any effect on market price. This is consistent with the empirical research findings of equity mispricing being mostly on the short side. So if the arbitrageurs only hear the good news, the stock price may well be trending up, until some of the arbitrageurs begin to suspect overvaluation and take short positions in the stock. As a result, the trading volume would increase, reflecting the increasing difference of opinion among the arbitrageurs. If the stream of good news consequently ceases or private signals of A and/or B become public information, the stock price would collapse.In a later paper, â€Å"Forecasting Crashes,† Chen, Hong and Stein found that the probability of a crash is positively correlated with an increase in trading volume relative to trend over prior six months and positive returns over the prior thirty-six months. Overall, it appears that many stock market anomalies can be explained through either behavioral biases or institutional imperfections. In fact, Richard Thaler suggests applying the behavioral model to institutional investing and corporate finance. What immediately comes to mind he re is a Nobel-winning economist Herbert Simon and his 1947 book, Administrative Behavior.Here is how the outcome of Simon’s research was summarized by the Nobel committee: He rejects the assumption made in the classic theory of the firm as an omniscient, rational, profit-maximizing entrepreneur. He replaces this entrepreneur by a number of cooperating decision makers, whose capacities for rational action are limited, both by a lack of knowledge about the total consequences of their decisions, and by personal and social ties. A classic example of this approach is a 1956 paper by John Lintner, â€Å"Distribution of Incomes of Corporations among Dividends, Retained Earnings, and Taxes,† published in the American Economic Review.Lintner started by interviewing the corporate executives about their dividend policy decisions. These interviews led him to a very simple model. Companies move the dividend toward a desired payout ratio, but try to avoid having to cut the dividend. This model remains an accurate description of dividend policy to this day. Conclusion We conclude this presentation by quoting Meir Statman: 15 Efficient Market Hypothesis And Behavioral Finance—Is A Compromise In Sight? People are â€Å"rational† in standard finance; they are â€Å"normal† in behavioral finance.Rational people care about utilitarian characteristics, but not valueexpressive ones, are never confused by cognitive errors, have perfect selfcontrol, are always averse to risk, and are never averse to regret. Normal people do not obediently follow that pattern. Standard finance asks for too much when it asks for market efficiency in the rational sense, and investment professionals ask for too much when they insist that the primary contribution of behavioral finance is its potential help in beating the market.

Human †Ultraviolet Essay

After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other. ?Race Homework After taking the quiz, it gives me a deeper impression of what race really is, and provide me a clear, new, and accurate understanding about how we are different. From the previous study I knew that human DNA can be traced back to Africa population, we have the same ancestry. But I have never further my thought to think about why there are differences among us. The differences and variation of us such as skin color, height, and susceptibility to disease is because changes in genes and environment. After the expansion of human from Africa, those slightly changes in genetics due to the changes of environment that human are encounter with that forms the differences of our appearance. For example, the differences of the skin color is due to the ability of adapting ultraviolet radiation, and geographic differences from time to time evolution of the human being. Because of these differences occur, the word â€Å"race† is created to classify these variation among people in different region of the world. However, we are 98% similar to each other genetically, because we have the same ancestry that we start from a village in Africa. Racism is very serious problem in the world. It is a stressor to us, which would cause illness, and mental problem. As person who understand this concept need to spread the idea to avoid racism. Racism is a false perspective from the difference among us, because we are 98% the same with each other.