Can company-fund manager meetings convey informational benefits? Exploring the rationalisation of equity investment decision making by UK fund managers

Conventional economic theory, applied to information released by listed companies, equates ‘useful’ with ‘price-sensitive’. Stock exchange rules accordingly prohibit the selec- tive, private communication of price-sensitive information. Yet, even in the absence of such communication, UK equity fund managers routinely meet privately with the senior execu- tives of the companies in which they invest. Moreover, they consider these brief, formal and formulaic meetings to be their most important sources of investment information. In this paper we ask how that can be. Drawing on interview and observation data with fund managers and CFOs, we find evidence for three, non-mutually exclusive explanations: that the characterisation of information in conventional economic theory is too restricted, that fund managers fail to act with the rationality that conventional economic theory assumes, and/or that the primary value of the meetings for fund managers is not related to their investment decision making but to the claims of superior knowledge made to clients in marketing their active fund management expertise. Our findings suggest a disconnect between economic theory and economic policy based on that theory, as well as a corre- sponding limitation in research studies that test information-usefulness by assuming it to be synonymous with price-sensitivity. We draw implications for further research into the role of tacit knowledge in equity investment decision-making, and also into the effects of the principal–agent relationship between fund managers and their clients.

Commercial real estate and equity market bubbles: are they contagious to REITs?

This paper uses a regime-switching approach to determine whether prices in the US stock, direct real estate and indirect real estate markets are driven by the presence of speculative bubbles. The results show significant evidence of the existence of periodically partially collapsing speculative bubbles in all three markets. A multivariate bubble model is then developed and implemented to evaluate whether the stock and real estate bubbles spill over into REITs. The underlying stock market bubble is found to be a stronger influence on the securitised real estate market bubble than that of the property market. Furthermore, the findings suggest a transmission of speculative bubbles from the direct real estate to the stock market, although this link is not present for the returns themselves.

What is the climate system able to do ‘on its own’?

The climate of the Earth, like planetary climates in general, is broadly controlled by solar irradiation, planetary albedo and emissivity as well as its rotation rate and distribution of land (with its orography) and oceans. However, the majority of climate fluctuations that affect mankind are internal modes of the general circulation of the atmosphere and the oceans. Some of these modes, such as El Nino-Southern Oscillation (ENSO), are quasi-regular and have some longer-term predictive skill; others like the Arctic and Antarctic Oscillation are chaotic and generally unpredictable beyond a few weeks. Studies using general circulation models indicate that internal processes dominate the regional climate and that some like ENSO events have even distinct global signatures. This is one of the reasons why it is so difficult to separate internal climate processes from external ones caused, for example, by changes in greenhouse gases and solar irradiation. However, the accumulation of the warmest seasons during the latest two decades is lending strong support to the forcing of the greenhouse gases. As models are getting more comprehensive, they show a gradually broader range of internal processes including those on longer time scales, challenging the interpretation of the causes of past and present climate events further.

Should kids pay their own way?

Children are expensive to raise. Ensuring that they are raised such that they are able to lead a minimally decent life costs time and money, and lots of both. Who is responsible for bearing the costs of the things that children are undoubtedly owed? This is a question that has received comparatively little scrutiny from political philosophers, despite children being such a drain on public and private finances alike. To the extent that there is a debate, two main views can be identified. The Parents Pay view says that parents, responsible for the existence of the costs, must foot the bill. The Society Pays view says that a next generation is a benefit to all, and so to allow parents to foot the bill alone is the worst kind of free-riding. In this paper, I introduce a third potentially liable party currently missing from the debate: children themselves. On my backward-looking view, we are entitled to ask people to contribute to the raising of children on the basis that they have benefited from being raised themselves.

Does orthogonalization really purge equity based property valuations of their general stock market influences?

This paper uses a recently developed nonlinear Granger causality test to determine whether linear orthogonalization really does remove general stock market influences on real estate returns to leave pure industry effects in the latter. The results suggest that there is no nonlinear relationship between the US equity-based property index returns and returns on a general stock market index, although there is evidence of nonlinear causality for the corresponding UK series.

Linear and non-linear transmission of equity return volatility: evidence from the US, Japan and Australia

This paper models the transmission of shocks between the US, Japanese and Australian equity markets. Tests for the existence of linear and non-linear transmission of volatility across the markets are performed using parametric and non-parametric techniques. In particular the size and sign of return innovations are important factors in determining the degree of spillovers in volatility. It is found that a multivariate asymmetric GARCH formulation can explain almost all of the non-linear causality between markets. These results have important implications for the construction of models and forecasts of international equity returns.

iPad use in fieldwork: formal and informal use to enhance pedagogical practice in a bring your own technology world

We report on use of iPads (and other IOS devices) for student fieldwork use and as electronic field notebooks and to promote active. We have used questionnaires and interviews of tutors and students to elicit their views and technology and iPad use for fieldwork. There is some reluctance for academic staff to relinquish paper notebooks for iPad use, whether in the classroom or on fieldwork, as well as use them for observational and measurement purposes. Students too are largely unaware of the potential of iPads for enhancing fieldwork. Apps can be configured for a wide variety of specific uses that make iPads useful for educational as well as social uses. Such abilities should be used to enhance existing practice as well as make new functionality. For example, for disabled students who find it difficult to use conventional note taking. iPads can be used to develop student self-directed learning and for group contributions. The technology becomes part of the students’ personal learning environments as well as at the heart of their knowledge spaces – academic and social. This blurring of boundaries is due to iPads’ usability to cultivate field use, instruction, assessment and feedback processes. iPads can become field microscopes and entries to citizen science and we see the iPad as the main ‘computing’ device for students in the near future. As part of the Bring Your Own Technology/Device (BYOD) the iPad has much to offer although, both staff and students need to be guided in the most effective use for self-directed education via development of Personal Learning Environments. A more student-oriented pedagogy is suggested to correspond to the increasing use of tablet technologies by students