The long-term price-earnings ratio

price-earnings ratio;value premium;arbitrage trading rule;UK stock returns;contrarian investment Abstract:  The price-earnings effect has been thoroughly documented and is the subject of numerous academic studies. However, in existing research it has almost exclusively been calculated on the basis of the previous year's earnings. We show that the power of the effect has until now been seriously underestimated due to taking too short-term a view of earnings. Looking at all UK companies since 1975, using the traditional P/E ratio we find the difference in average annual returns between the value and glamour deciles to be 6%. This is similar to other authors' findings. We are able to almost double the value premium by calculating the P/E ratio using earnings averaged over the previous eight years.

Reaction of 4-phenylbut-3-en-2-one with cyanoacetamide in 2:1 ratio

The reaction of 4-phenylbut-3-en-2-one with cyanoacetamide is not confined to a 1 : 1 reaction [which results in formation of 3-cyano-6-methyl-4-phenylpyridin-2(1H)-one]. The reaction of 2 mole equivalents of 4-phenylbut-3-en-2-one with one of cyanoacetamide also takes place, the products being 1-cyano-6-hydroxy-6-methyl-4-methylene-8,9-diphenyl-3-azabicyclo[3.3.1]nonan-2-one and 3-cyano-6-methyl-3-(3-oxo-1-phenylbutyl)-4-phenyl-3,4-dihydropyridin-2(1H)-one. The latter compound cyclises in acid medium to form 6-acetyl-4-cyano-1-methyl-5,8-diphenyl-2-azabicyclo[2.2.2]octan-3-one. X-Ray crystal structures of the 3-azabicyclo[3.3.1]nonan-2-one and the 3-azabicyclo[2.2.2]octan-2-one derivatives are described.

Use of the ratio plot in capture-recapture estimation

Statistical graphics are a fundamental, yet often overlooked, set of components in the repertoire of data analytic tools. Graphs are quick and efficient, yet simple instruments of preliminary exploration of a dataset to understand its structure and to provide insight into influential aspects of inference such as departures from assumptions and latent patterns. In this paper, we present and assess a graphical device for choosing a method for estimating population size in capture-recapture studies of closed populations. The basic concept is derived from a homogeneous Poisson distribution where the ratios of neighboring Poisson probabilities multiplied by the value of the larger neighbor count are constant. This property extends to the zero-truncated Poisson distribution which is of fundamental importance in capture–recapture studies. In practice however, this distributional property is often violated. The graphical device developed here, the ratio plot, can be used for assessing specific departures from a Poisson distribution. For example, simple contaminations of an otherwise homogeneous Poisson model can be easily detected and a robust estimator for the population size can be suggested. Several robust estimators are developed and a simulation study is provided to give some guidance on which should be used in practice. More systematic departures can also easily be detected using the ratio plot. In this paper, the focus is on Gamma mixtures of the Poisson distribution which leads to a linear pattern (called structured heterogeneity) in the ratio plot. More generally, the paper shows that the ratio plot is monotone for arbitrary mixtures of power series densities.

Riluzole neuroprotection in a parkinson’s disease model involves suppression of reactive astrocytosis but not GLT-1 regulation

Background Riluzole is a neuroprotective drug used in the treatment of motor neurone disease. Recent evidence suggests that riluzole can up-regulate the expression and activity of the astrocyte glutamate transporter, GLT-1. Given that regulation of glutamate transport is predicted to be neuroprotective in Parkinson's disease, we tested the effect of riluzole in parkinsonian rats which had received a unilateral 6-hydroxydopamine injection into the median forebrain bundle. Results Rats were treated with intraperitoneal riluzole (4 mg/kg or 8 mg/kg), 1 hour before the lesion then once daily for seven days. Riluzole produced a modest but significant attenuation of dopamine neurone degeneration, assessed by suppression of amphetamine-induced rotations, preservation of tyrosine hydroxylase positive neuronal cell bodies in the substantia nigra pars compacta and attenuation of striatal tyrosine hydroxylase protein loss. Seven days after 6-hydroxydopamine lesion, reactive astrocytosis was observed in the striatum, as determined by increases in expression of glial fibrillary acidic protein, however the glutamate transporter, GLT-1, which is also expressed in astrocytes was not regulated by the lesion. Conclusions The results confirm that riluzole is a neuroprotective agent in a rodent model of parkinson’s disease. Riluzole administration did not regulate GLT-1 levels but significantly reduced GFAP levels, in the lesioned striatum. Riluzole suppression of reactive astrocytosis is an intriguing finding which might contribute to the neuroprotective effects of this drug.

Carbon and nitrogen stable isotope ratio analysis of freshwater, brackish and marine fish from Belgian archaeological sites (1st and 2nd millennium AD)

Carbon and nitrogen stable isotope ratios were measured in 157 fish bone collagen samples from 15 different archaeological sites in Belgium which ranged in ages from the 3rd to the 18th c. AD. Due to diagenetic contamination of the burial environment, only 63 specimens produced results with suitable C:N ratios (2.9–3.6). The selected bones encompass a wide spectrum of freshwater, brackish, and marine taxa (N = 18), and this is reflected in the δ13C results (−28.2‰ to −12.9%). The freshwater fish have δ13C values that range from −28.2‰ to −20.2‰, while the marine fish cluster between −15.4‰ and −13.0‰. Eel, a catadromous species (mostly living in freshwater but migrating into the sea to spawn), plots between −24.1‰ and −17.7‰, and the anadromous fish (living in marine environments but migrating into freshwater to spawn) show a mix of freshwater and marine isotopic signatures. The δ15N results also have a large range (7.2‰ to 16.7‰) indicating that these fish were feeding at many different trophic levels in these diverse aquatic environments. The aim of this research is the isotopic characterization of archaeological fish species (ecology, trophic level, migration patterns) and to determine intra-species variation within and between fish populations differing in time and location. Due to the previous lack of archaeological fish isotope data from Northern Europe and Belgium in particular, these results serve as an important ecological backdrop for the future isotopic reconstruction of the diet of human populations dating from the historical period (1st and 2nd millennium AD), where there is zooarchaeological and historical evidence for an increased consumption of marine fish.

Low relative humidity triggers RNA-directed de novo DNA methylation and suppression of genes controlling stomatal development

Environmental cues influence the development of stomata on the leaf epidermis, and allow plants to exert plasticity in leaf stomatal abundance in response to the prevailing growing conditions. It is reported that Arabidopsis thaliana ‘Landsberg erecta’ plants grown under low relative humidity have a reduced stomatal index and that two genes in the stomatal development pathway, SPEECHLESS and FAMA, become de novo cytosine methylated and transcriptionally repressed. These environmentally-induced epigenetic responses were abolished in mutants lacking the capacity for de novo DNA methylation, for the maintenance of CG methylation, and in mutants for the production of short-interfering non-coding RNAs (siRNAs) in the RNA-directed DNA methylation pathway. Induction of methylation was quantitatively related to the induction of local siRNAs under low relative humidity. Our results indicate the involvement of both transcriptional and post-transcriptional gene suppression at these loci in response to environmental stress. Thus, in a physiologically important pathway, a targeted epigenetic response to a specific environmental stress is reported and several of its molecular, mechanistic components are described, providing a tractable platform for future epigenetics experiments. Our findings suggest epigenetic regulation of stomatal development that allows for anatomical and phenotypic plasticity, and may help to explain at least some of the plant’s resilience to fluctuating relative humidity.

Suppression of a pro-apoptotic K+ channel as a mechanism for hepatitis C virus persistence

An estimated 3% of the global population are infected with hepatitis C virus (HCV), and the majority of these individuals will develop chronic liver disease. As with other chronic viruses, establishment of persistent infection requires that HCV-infected cells must be refractory to a range of pro-apoptotic stimuli. In response to oxidative stress, amplification of an outward K(+) current mediated by the Kv2.1 channel, precedes the onset of apoptosis. We show here that in human hepatoma cells either infected with HCV or harboring an HCV subgenomic replicon, oxidative stress failed to initiate apoptosis via Kv2.1. The HCV NS5A protein mediated this effect by inhibiting oxidative stress-induced p38 MAPK phosphorylation of Kv2.1. The inhibition of a host cell K(+) channel by a viral protein is a hitherto undescribed viral anti-apoptotic mechanism and represents a potential target for antiviral therapy.

Radar bright band correction using the linear depolarisation ratio

The enhanced radar return associated with melting snow, ‘the bright band’, can lead to large overestimates of rain rates. Most correction schemes rely on fitting the radar observations to a vertical profile of reflectivity (VPR) which includes the bright band enhancement. Observations show that the VPR is very variable in space and time; large enhancements occur for melting snow, but none for the melting graupel in embedded convection. Applying a bright band VPR correction to a region of embedded convection will lead to a severe underestimate of rainfall. We revive an earlier suggestion that high values of the linear depolarisation ratio (LDR) are an excellent means of detecting when bright band contamination is occurring and that the value of LDR may be used to correct the value of Z in the bright band.

Does consumption-wealth ratio signal stock returns? VECM results for Germany

This paper studies the signalling effect of the consumption−wealth ratio (cay) on German stock returns via vector error correction models (VECMs). The effect of cay on U.S. stock returns has been recently confirmed by Lettau and Ludvigson with a two−stage method. In this paper, performance of the VECMs and the two−stage method are compared in both German and U.S. data. It is found that the VECMs are more suitable to study the effect of cay on stock returns than the two−stage method. Using the Conditional−Subset VECM, cay signals real stock returns and excess returns in both data sets significantly. The estimated coefficient on cay for stock returns turns out to be two times greater in U.S. data than in German data. When the two−stage method is used, cay has no significant effect on German stock returns. Besides, it is also found that cay signals German wealth growth and U.S. income growth significantly.

Effect of forage conservation method on plasma lipids, mammary lipogenesis, and milk fatty acid composition in lactating cows fed diets containing a 60:40 forage-to-concentrate ratio

The effects of forage conservation method on plasma lipids, mammary lipogenesis, and milk fat were examined in 2 complementary experiments. Treatments comprised fresh grass, hay, or untreated (UTS) or formic acid treated silage (FAS) prepared from the same grass sward. Preparation of conserved forages coincided with the collection of samples from cows fed fresh grass. In the first experiment, 5 multiparous Finnish Ayrshire cows (229 d in milk) were used to compare a diet based on fresh grass followed by hay during 2 consecutive 14-d periods, separated by a 5-d transition during which extensively wilted grass was fed. In the second experiment, 5 multiparous Finnish Ayrshire cows (53 d in milk) were assigned to 1 of 2 blocks and allocated treatments according to a replicated 3 × 3 Latin square design, with 14-d periods to compare hay, UTS, and FAS. Cows received 7 or 9 kg/d of the same concentrate in experiments 1 and 2, respectively. Arterial concentrations of triacylglycerol (TAG) and phospholipid were higher in cows fed fresh grass, UTS, and FAS compared with hay. Nonesterified fatty acid (NEFA) concentrations and the relative abundance of 18:2n-6 and 18:3n-3 in TAG of arterial blood were also higher in cows fed fresh grass than conserved forages. On all diets, TAG was the principle source of fatty acids (FA) for milk fat synthesis, whereas mammary extraction of NEFA was negligible, except during zero-grazing, which was associated with a lower, albeit positive calculated energy balance. Mammary FA uptake was higher and the synthesis of 16:0 lower in cows fed fresh grass than hay. Conservation of grass by drying or ensiling had no influence on mammary extraction of TAG and NEFA, despite an increase in milk fat secretion for silages compared with hay and for FAS than UTS. Relative to hay, milk fat from fresh grass contained lower 12:0, 14:0, and 16:0 and higher S3,R7,R11,15-tetramethyl-16:0, cis-9 18:1, trans-11 18:1, cis-9,trans-11 18:2, 18:2n-6, and 18:3n-3 concentrations. Even though conserved forages altered mammary lipogenesis, differences in milk FA composition were relatively minor, other than a higher enrichment of S3,R7,R11,15-tetramethyl-16:0 in milk from silages compared with hay. In conclusion, differences in milk fat composition on fresh grass relative to conserved forages were associated with a lower energy balance, increased uptake of preformed FA, and decreased synthesis of 16:0 de novo in the mammary glands, in the absence of alterations in stearoyl-coenzyme A desaturase activity.

Negative blood oxygen level dependence in the rat: a model for investigating the role of suppression in neurovascular coupling

Modern neuroimaging techniques rely on neurovascular coupling to show regions of increased brain activation. However, little is known of the neurovascular coupling relationships that exist for inhibitory signals. To address this issue directly we developed a preparation to investigate the signal sources of one of these proposed inhibitory neurovascular signals, the negative blood oxygen level-dependent (BOLD) response (NBR), in rat somatosensory cortex. We found a reliable NBR measured in rat somatosensory cortex in response to unilateral electrical whisker stimulation, which was located in deeper cortical layers relative to the positive BOLD response. Separate optical measurements (two-dimensional optical imaging spectroscopy and laser Doppler flowmetry) revealed that the NBR was a result of decreased blood volume and flow and increased levels of deoxyhemoglobin. Neural activity in the NBR region, measured by multichannel electrodes, varied considerably as a function of cortical depth. There was a decrease in neuronal activity in deep cortical laminae. After cessation of whisker stimulation there was a large increase in neural activity above baseline. Both the decrease in neuronal activity and increase above baseline after stimulation cessation correlated well with the simultaneous measurement of blood flow suggesting that the NBR is related to decreases in neural activity in deep cortical layers. Interestingly, the magnitude of the neural decrease was largest in regions showing stimulus-evoked positive BOLD responses. Since a similar type of neural suppression in surround regions was associated with a negative BOLD signal, the increased levels of suppression in positive BOLD regions could importantly moderate the size of the observed BOLD response.