April 2013 archive

Renaming Hurricanes Probably Wouldn’t Have Increased Donations by $700 Million

Adam Alter, Professor of Marketing and Psychology at NYU, thinks that he’s found a way to increase aid donations in the aftermath of hurricanes. His solution: give hurricanes names with very common initials (e.g. “J” or “M”) because people allegedly donate more when Hurricanes share their first initial. To support his suggestion, Alter cites a …

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Be sure you’re using the right calculation when assessing portfolio performance

Many investors never evaluate their investment performance beyond simply noting gains and losses. Perhaps this is because they are not aware of how to conduct a proper evaluation. A couple basic calculations can help you better assess your portfolio returns and your financial advisor. A growth calculation is quite simple for the portfolio that never …

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Giving Away Amazon Prime Likely Won’t Make Everyone Big Spenders

Wired Business reports that analysts at Morningstar and Consumer Intelligence Research Partners (CIRP) believe that Amazon could dramatically increase profits by selling its Prime membership for much less than the current price of $79. The Amazon Prime membership, which provides a full year of free two-day shipping, is associated with much larger consumer spending. According …

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Is Social Media the Right Medium for Public Company Announcements?

The SEC thinks it is.  On April 2, 2013, the SEC reported (see: here) that it is okay for U.S. Public companies to use social media to make announcements.  Companies must inform investors that they plan on using social media to do so and which medium they will use. The SEC announcement stated: There has …

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Office switches to a subscription model – and it’s worth it

Microsoft recently started offering a Office Suite product geared towards families: Office 365. For an annual subscription fee of $99.99, Office 365 gives access to the entire Microsoft Office suite, plus cloud storage and free calls using Skype. Below is quick and dirty comparison pricing between Office 365 and the individual products purchased piecemeal. What …

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What explains baseball’s massive revenues?

A chart prepared by businessinsider.com indicates that MLB grossed about $7.7 billion in 2012, well behind the NFL (about $9.5 billion) and well ahead of the NBA (about $4.3 billion). Businessinsider does not specify which sales are included as part of these totals (tickets, television contracts, licensing and merchandising, etc.), so the totals may very …

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What’s More Popular—NCAA Basketball or Football?

We’re in the throes (sorry for the pun) of March Madness, arguably the most popular collegiate sports competition in the country. But just because the NCAA Football Championships don’t have a month dedicated to bracket-building and a catchy, alliterative name, can we conclude that basketball is the most popular NCAA sport? Measuring popularity is tricky, …

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Valuations should carefully consider application of the income and market approach

In a recent bankruptcy case, a plaintiff valuation expert provided, without proper justification, 70% reliance on what the Court described as a biased application of the discounted cash flow (DCF) approach to value (an income approach)  to determine her appraisal conclusions. The discounted cash flow analysis is a commonly-used, and conceptually excellent method of performing …

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Which Major League Sport is Googled the Most? And is that Changing?

One way to approximate each professional sport league’s relative popularity is to look at web search trends over time. Google Trends simplifies this task tremendously by reporting the relative frequency by which certain words or phrase are entered into Google’s search engine. The chart below plots the raw data from Google Trends for the five …

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