Lessons Learned from Week 7 of Fall Quarter

Ethics

• Aspiration statements
  
• Work vs. family
  
• CEO must be role model of values; CEO who would put his own stamps on personal mail sent from the company.
  
• Environmental regulation/company stance issues
  
• TV/advertising/press ethical issues
  

Behavioral finance

• Moods affect stock market (clouds, weather, lunar phases, festive occasions, degree of coldness)
  
• Cloudy days, cold days, DST transition and coming back to dark house all give negative results
  
• Weekend effect (markets down Monday; people upset coming in to work after weekend)
  
• People behave weird around full moon days (lunatic): negative effect across all international exchanges
  
• Reversal of large stock price decreases over next 3-4 days
  
• Sell in may and go away; Halloween indicator; November to May has stronger growth; huge discrepancy between winter and summer months returns; upward momentum starts in October (Winter bonuses; gone fishing/summer vacation/kids distracting)
  
• If a nation loses World Cup game, the day after the stock market goes down.
  
• Content analysis for investor mood; investor overreaction and rebound
  
• Zero predictive content in Cramer's recommendations; his role in society: validates people's opinions; people like to think their environment is predictable.
  
• Bad ticker symbol or name (.com in name increased market cap when was in fashion; if take out of name when out of fashion, market cap goes up); names matter (in efficient market, shouldn't matter).
  
• Wrong/right MCI/MCIC; wrong MCI moving with right MCI
  
• Socionomics: social mood determines social events (not other way around)
  
• Correlation between stock market and fashion (hemline indicator, music genres moving stock market up)
  

Doing deals

• Joint venture deals
  
• Equal footing important
  
• Trust but verify
  
• Use milestones
  
• Non-competition clauses
  
• Negotiate buy-sell, default provisions up front
  
• Information rights