An exotic derivative is – you guessed it – an exotic member of the larger derivative family. It’s basically any derivative (aka complicated financial product) that is considered out-of-the-box. The label is somewhat time-dependent because a product that is “exotic” now may become commonplace in twenty years. All the other (boring) derivatives are often referred to as “vanilla.” So it’s up to you – will it be vanilla or triple-chocolate macadamia in that investment waffle cone?
A Performance Fee is…
July 21st, 2011A performance fee is an additional payment based on success. For example, a hedge fund manager might receive a performance fee (like a bonus) based on the profitability of his fund. Ideally, the promise of this fee will encourage the manager to make the best possible investments.
Apple Earnings Insanity
July 20th, 2011
(source: nytimes.com)
“Oh my god. Ohhh my god. Apple. Apple!!!!!!!”
– Intern Spencer, screaming as he watched the price of everyone’s favorite mega-corporation skyrocket to almost $400 per share.
(Just for fun, compare that with a maximum price of $9.54 per share in 2001.)
The reason for the sudden spike? Apple released its quarterly earnings report* on Tuesday evening, showing a record $28.57 billion in revenue. That’s $28.57 billion. In three months.
In the handy graph above, you can see investors getting excited about the upcoming earnings announcement on Monday and Tuesday, and then pretty much exploding with enthusiasm on Tuesday night.
What else would you expect from a company that has enough cash to buy almost every other mobile phone maker in the world, and that has enough fans in China to support an entire industry of counterfeit Apple stores?
* In the U.S., all publicly traded companies are required to produce earnings reports which disclose their sales numbers and net profit over the prior three months.)
Apple Earnings Insanity
July 20th, 2011
(source: nytimes.com)
“Oh my god. Ohhh my god. Apple. Apple!!!!!!!”
– Intern Spencer, screaming as he watched the price of everyone’s favorite mega-corporation skyrocket to almost $400 per share.
(Just for fun, compare that with a maximum price of $9.54 per share in 2001.)
The reason for the sudden spike? Apple released its quarterly earnings report* on Tuesday evening, showing a record $28.57 billion in revenue. That’s $28.57 billion. In three months.
In the handy graph above, you can see investors getting excited about the upcoming earnings announcement on Monday and Tuesday, and then pretty much exploding with enthusiasm on Tuesday night.
What else would you expect from a company that has enough cash to buy almost every other mobile phone maker in the world, and that has enough fans in China to support an entire industry of counterfeit Apple stores?
* In the U.S., all publicly traded companies are required to produce earnings reports which disclose their sales numbers and net profit over the prior three months.)
Get Smart: How to Think About Thinking with Chris Stewart
July 20th, 2011
W. Christopher Stewart is a philosophy professor at Houghton College in Houghton, NY, where he teaches courses on aesthetics, the history of philosophy, Nietzsche, Kierkegaard, philosophy of science, and business ethics. He is the author of, among other things, an essay on magic and technology forthcoming in The Hobbit and Philosophy,and earlier co-authored an essay on magic, science, and the ethics of technology for Harry Potter and Philosophy. He has served as a consultant for Pfizer, where he advised a team of marketing experts on the relationship between clinical research, consumer behavior, and Pascal’s wager.
TILE: What exactly is philosophy?
Chris: Philosophy explores fundamental assumptions about the world and what it means to be a human being. Alasdair MacIntyre (a philosopher from the University of Notre Dame) called it “the discipline in which you learn to think about what you’re doing in other disciplines.” I like that because it highlights the fact that philosophers are interested in everything, but at a very deep level. They’re interested in the underlying assumptions that inform other activities and disciplines, from science to business to sports to anything else you can imagine.
TILE: We can’t all be Aristotle. Philosophy, like finance, often scares people away. Is it even possible for the average person to philosophize like a pro?
Chris: Aristotle himself said that philosophy begins with wonder. We look around and see the way things are, and then begin to ask questions.
Philosophizing is a natural human response to experience. The evidence for that is the most common question on the lips of every small child: “Why?” Somewhere along the way, many of us lose our natural sense of wonder, and philosophizing starts to seem like something unfamiliar or strange.
Also, philosophizing isn’t just about expressing opinions, which is the easy part. It’s knowing why we believe what we believe, and being able to provide reasons to anyone who asks us for them.
That’s not easy, but anyone can do it. Just keep asking “Why?”
TILE: What’s one of your top takeaways from a favorite philosopher?
Chris: Plato said that, although mandatory physical exercise does no harm to the body, mandatory learning “never sticks to the mind.” I’ve thought about that quite a bit as a teacher, but I think it applies pretty well in any context. Any time you’re doing something simply because you think you have to, not because you want to, it’s probably not doing anyone much good, including yourself.
TILE: What’s the best advice you would give to your teenage self?
Chris: Be yourself. It sounds trite, but I really do think the impulse to conform to what everyone else is doing limits your potential. Socrates was big on “the examined life.” (Read Plato’s “Apology” to see Socrates in action.) So don’t just run with the pack. Constantly ask yourself “Why am I doing this? Where is it leading me?”
>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.
Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!
Get Wellthy
July 19th, 2011
(photo credit: Pink Sherbet Photography)
Trying to get wellthy? No, friends, that’s not a typo – according to consumer trend tracker trendwatching.com, a hearty lung capacity and rock hard abs are becoming as important a status symbol as, say, a sweet ride or a fancy new iThing.
Witness:
• People are increasingly ranking physical fitness and health as an important component of their happiness.
• Around the world, people are using more mobile healthcare devices and apps – most of which are purchased by consumers, not doctors.
• Tons of new fitness “toys” – Wii Fit, Sleep On It, the Fitbit – have been hitting the market lately.
Looks like you’ll have to literally keep up with the Joneses these days…
Get Wellthy
July 19th, 2011
(photo credit: Pink Sherbet Photography)
Trying to get wellthy? No, friends, that’s not a typo – according to consumer trend tracker trendwatching.com, a hearty lung capacity and rock hard abs are becoming as important a status symbol as, say, a sweet ride or a fancy new iThing.
Witness:
• People are increasingly ranking physical fitness and health as an important component of their happiness.
• Around the world, people are using more mobile healthcare devices and apps – most of which are purchased by consumers, not doctors.
• Tons of new fitness “toys” – Wii Fit, Sleep On It, the Fitbit – have been hitting the market lately.
Looks like you’ll have to literally keep up with the Joneses these days…
Investing with Socrates
July 18th, 2011 W. Christopher Stewart is a philosophy professor at Houghton College in Houghton, NY, where he teaches courses on aesthetics, the history of philosophy, Nietzsche, Kierkegaard, philosophy of science, and business ethics. He is the author of, among other things, an essay on magic and technology forthcoming in The Hobbit and Philosophy, and earlier co-authored an essay on magic, science, and the ethics of technology for Harry Potter and Philosophy. He has served as a consultant for Pfizer, where he advised a team of marketing experts on the relationship between clinical research, consumer behavior, and Pascal’s wager.
TILE: What does philosophy have to do with money?
Chris: One very large and important branch of philosophy has to do with human happiness or well-being, and what money or wealth (among other things) contribute to human life. We all want what the ancient philosophers called “the good life,” but we’re often confused about where to find it. What are the key ingredients of the good life? Can a human being be truly happy without friends, music, beauty, meaningful work, or money?
Socrates famously challenged his fellow Athenians to examine their values and priorities, warning them against placing the pursuit of wealth or honor or power above virtue and the health of their “souls.” So philosophers have said quite a lot about what money properly contributes to the good life, and how it can sometimes get in the way.
TILE: One of the areas of philosophy that you’ve studied is business ethics. Tell us about it. Why is it important for young adults in particular to be able to identify good business practices or understand a company’s core mission?
Chris: As human beings, we don’t just do things, we evaluate the things we do. There’s more than one way to do this. We might ask, for example, what’s the best thing to do from a legal point of view. Is what I’m doing legal or not? Or we might ask what’s the best thing to do from a business point of view? How can I make the most money? Or we might ask what’s the best thing to do from an ethical point of view? How will my actions affect others (not just me)? Business ethics explores how all of these kinds of questions relate to one another, which is particularly important because what’s best from an ethical point of view isn’t always the same as what’s best from a business point of view. Business ethics goes beyond simply not breaking the law, and helps you make good decisions within the realm of what the law permits you to do.
Also, who we become as people is shaped by the environments in which we work. So when you’re deciding who to work with, or what to invest in, check out the way that people within a given organization treat one another, and how they treat the people they claim to be serving. Look for evidence in a company’s core mission statement for a clear understanding of how the product or service that company provides makes the world a better place, not just for its owners or employees, but for everyone. That’s where you’ll find the moral justification of any business, not in whatever philanthropic causes the business supports, which however worthy (think Ronald McDonald Houses) might have nothing at all to do with its core business.
It’s becoming more and more apparent that not-just-for-profit business, more than government or philanthropy, is the most important engine for solving problems in our world. By the same token, it can also cause tremendous harm. So businesses, and those who invest in them, must have a clear understanding of why they exist, one that goes well beyond making money for their owners.
>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.
Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!
Teaching and Learning in the South Bronx
July 18th, 2011
Evan Piekara is an alumnus of Teach For America, a national organization that works to ensure educational opportunities for students of all backgrounds. During his 4 years as a corps member, he taught 6th and 7th grade in the South Bronx. He’s also worked as an Institute Staff Member, helping to train the 2008 and 2009 corps. As a result of his classroom experiences, he developed some interesting views on education in America and the importance of gaining financial understanding at a young age.
TILE: What inspired you to become involved with Teach for America?
Evan: I was inspired by its mission that all children deserve an excellent education, and the fact that TFA works tirelessly to ensure that your income level or where you grew up does not determine your future.One thing that has always impressed me about TFA is that it is constantly looking to improve and become more effective. It has both a short-term strategy of getting people involved in education who may not have entered in the first place with a long-term mission of them using these experiences whether as teachers, business leaders, lawyers, doctors, politicians, or advocates to continue to support the mission and improve education for all.
TILE: What qualities do you look for in teachers who become part of your organization?
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July 18th, 2011What does money mean to you?