Nature of emotions Essay

Compare The Two of Us by Armitage and Havisham by Duffy, paying particular attention to how thoughts and feelings are presented. The two poems by Armitage and Duffy focus specifically on the destructive nature of emotions. The Two of Us focuses on the superficiality of possession whilst Havisham considers the deception of relationships. This brings about both of the speakers and poets feelings. The Two of Us deals with a comparison between two brothers who differ in terms of wealth and professions. There is also a moral to Armitage’s poem, which emphasises the idea that material goods will be useless in death. This means that the poem is thought provoking. On the other hand, Havisham concentrates on a female speaker who is angry and bitter about a failed relationship, most likely caused from an unfaithful partner. The poet explores themes of jealousy and violence, which gives an interesting twist on Duffy’s familiar theme of love. Nevertheless, the two poems have similarities in terms of perspective. They both employ the personal pronoun â€Å"I† which expresses the deep individual thoughts and feelings of the speaker. However, The Two of Us also involves the second person pronoun â€Å"you† to express a feeling of accusation and deep resentment. There are several differences in the structure of both poems. The Two of Us has a rhyme scheme, which mirrors the ‘I’ and ‘you’ of the poem. However, Havisham is written in free verse, which reflects the spontaneity of the speaker’s emotions. It also shows that the speaker is lacking control of her own feelings Therefore, The Two of US has a stricter structure to reinforce the divide between the rich brother and the poor one. There are similar aspects of thoughts and feelings in terms of imagery. Both employ colour imagery to depict specific emotions and moods, for example, the colour â€Å"gold† in The Two of Us has connotations of glamour and a degree of luxury. Havisham uses colour in a more traditional and stereotypical sense i. e. â€Å"dark green pebbles for eyes,† this illustrating the speaker’s envy. However, The two of us is written more uniquely; this shown through the cluster of similes in the fifth stanza; â€Å"Like I’m some cutting taken from the tree† â€Å"Like I’m some twig related to the root. † The speaker emphasises that they are actually related and could possibly be twins. There are also similarities and differences between the two poems in terms of language. Both use juxtapositions but for different purposes. In The Two of Us it provides a contrast between rich and poor whilst in Havisham in expresses her feelings for her lover, â€Å"Beloved sweetheart bastard. † However, both poems have unique features to portray thoughts and feelings. The pathetic fallacy in The Two of Us allows the reader to empathise towards the poor conditions the speaker lives in; † †¦ Rain to racket on the metal roof† The harsh sounding alliteration makes the weather seem a lot tougher and therefore the conditions he faces a lot tougher. This makes the rich brother a more unlikeable character because he has not helped the poor one. Havisham uses different language techniques to portray the message of the poem. The final stanza shows how hurt and upset the speaker is, â€Å"Don’t think that its only the heart that b-b-b-breaks. † This breakdown in language shows that the speaker is sobbing and been affected by the broken relationship. Overall, both poems are successful in presenting the thoughts and feeling of the speakers. They target specific emotions from the reader which aids in the reader understanding the poems.

Application of Mis in Marketing

Information is the basis for every decision taken in an organization. The efficiency of management depends upon the availability of regular and relevant information. Thus it is essential that an effective and efficient reporting system be developed as part of accounting system. The main object of management information is to obtain the required information about the operating results of an organization regularly in order to use them for future planning and control. CONCEPT OF MISDEF: â€Å"A system of people, equipment, procedures, documents and communications that collects, validates, operates on transformers, stores, retrieves, and present data for use in planning, budgeting, accounting, controlling and other management process. † The Marketing Information System â€Å"A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for u se by marketing decision makers to improve their marketing planning, implementation, and control†.Sales and Marketing is a key process for the sustenance of any business as revenues are a direct outcome of it. Information Systems within the Sales and Marketing process implement technologies that allow the personnel to access crucial and updated information related to access crucial and updated information related to customer preferences and market demands to offer prompt services. Information Systems are also helpful in identifying the most effective sales strategy that can be used in any particular case based on specified criteria, such as the market segment or the product category.APPLICATION OF MIS IN MARKETING Major Components of a marketing information system The marketing information systems and its subsystems The above diagram illustrates the major components of an MIS, the environmental factors monitored by the system and the types of marketing decision which the MIS s eeks to underpin. MARKETING MODELS: Within the MIS there has to be the means of interpreting information in order to give direction to decision. These models may be computerized or may not. Typical tools are: †¢ Time series sales modes. Brand switching models. †¢ Linear programming. †¢ Elasticity models (price, incomes, demand, supply, etc. ). †¢ Regression and correlation models. †¢ Analysis of Variance (ANOVA) models. †¢ Sensitivity analysis. †¢ Discounted cash flow. †¢ Spreadsheet ‘what if models. These and similar mathematical, statistical, econometric and financial models are the analytical subsystem of the MIS . MARKETING STRATEGIES USING MIS The role of Information Systems in devising Marketing strategies has been increasing over the years.Organizations derive the following benefits from implementing Information Systems in marketing: ? Creating effective Marketing plans: Target market identification, implementation of the entire m arketing campaign and finally setting up of required standards criteria and evaluating the performance of the plans generated. ? Customizing modules for specific requirements: Information can be used to manage campaigns to retain customers, vendors and optimize services regarding each contact. ? Managing critical business issues: Information Systems are effectively sed to manage critical issues, such as costs and budget analysis, media policies, establishing milestones and segment management for every campaign. ? Creating Product promotional strategies: Information Systems are used to design, analyze and implement product promotional strategies of a particular brand according to its price, quality, and other related issues. ?Conducting market analysis: Information Systems can be used to survey the potential market and this information can be analyzed to develop specific target market strategies. Preparing comprehensive reports: Information Systems can filter information to provide c ustomized solutions to marketers. This information can be viewed in various ways such as summarized views, total, sub total, statistical views or graphic views. DIFFERENT TYPES OF REPORTS USED IN MARKETING SALES CALL REPORT – This report contains data about the potential customer. It also contains details about the types of items customer is interested in. QUOTATION – It is a document that gives a statement of the price, terms and the condition for a sale a supplier offers for the items.PURCHASE ORDER – It is a written document from the customer to the seller listing the required items and providing a description of the goods. INVOICE – It is a note asking for payments for goods and services that have been supplied. The invoice accompanies the delivery of ordered goods. SALES REPORT (product wise) – A sales report suggests the total product wise sales. From this report one can draw conclusions about the product preferences of customers in different months of the year. 1. MONTHLY SALES REPORT (Sales person wise) – Sales persons are given individual sales targets.This report shows the cumulative sales made by each salesperson for a month. OTHER ASPECTS OF MIS IN MARKETING Managing Financial transactions Providing stock and inventory details Maintaining relevant customer information Integrating sales processes MANAGEMENT INFORMATION SYSTEM IN E – COMMERCE E – Commerce is one of the fastest growing segments of the internet, which is used by businesses.BENEFITS: Information Systems are being used in management of E – commerce. The Information Systems offer the following benefits: ? Integrating existing point of sales systems. Integrating with other E – Commerce driven applications to provide the analysis of market effectiveness in terms of real business. ? Managing customer information that can then be used for effective analysis to predict buying trends. ? Provides various methods that can be us ed for diverting traffic onto the required websites. ? Integrating graphs and multiple report building wizards for the creation of effective reports based on any type of information. ? Information systems also provide various customer retention strategies according to each segment or market campaign or sales force.

Inflammatory Cascades ad NSAID’s

When tissues are injured a specific reaction to the injury takes place. A collection of irritants and other chemical mediators are released into the injured area to aid in stabilization of the injured tissue, protection against further injury, and stimulation of healing at the injury site. These factors are referred to as the inflammatory cascade. And it includes substances such as histamine, bradykinin and prostaglandins, which aid in vasodilation to the injured area; serotonin, which acts as a vasoconstrictor, and growth factors and cytokines which act to increase fibroblast and macrophage migration to the injury site. 1) This is the acute inflammatory response and it is essential to the healing process. It should be noted that this acute reaction is healthy and we do not want to impede this process. We do, however, wish t aid the healing process in order to resolve the acute inflammatory response before it passes into a chronic state of inflammation. It is th chronic state of inflammation that is always destructive to tissues and is equated to disease. (2) When repair is successful, inflammation becomes a limited phenomena. Some conditions such as asthma, allergies, autoimmune diseases, fibromyalgia, migraine headaches, osteoarthritis, peptic ulcers, and psoriasis comprise examples of perpetual or chronic inflammation. (3) It is these chronic conditions, hallmarked by pain and fatigue, that eventually lead to loss of function. The treatment that millions of people turn to each year is Non-Steroidal Anti-Inflammatory Drugs (NSAID's). However, long-term therapy has revealed an alarming list of adverse side effects associated with these drugs such as gastrointestinal bleeding, and suppression of inherent anti-inflammatory pathways and tissue repair. In addition, NSAID's have been linked to â€Å"leaky gut syndrome†, in which gut permeability is increased, allowing antigenic toxins to flood the systemic circulation via paracellular and transcellular absorption. (5) Thus, nutritional modification is the best way to guard against adverse reactions or side effects. More importantly, nutritional status is the foundation in which inflammation becomes modifiable. (3) The natural pH of the human body lies in a range between 6. 0 and 7. 4. 7) However, after an injury the pH of some tissues may fall well-below pH 6. 0, thus owing to a very acidic environment. This type of condition favors the inflammatory cascade. An acid environment is promoted by metabolism of glucose and triglycerides, and gastrointestinal bacterial metabolism of unabsorbed carbohydrates, fats, and proteins. (9) Thus, acid production depends on the diet. Also, meats and grains are a source of potential acids, whereas fruits and vegetables are a potential source of bases. 9) Therefore, a reduction in the amount of meats and grains along with a concomitant increase in the amount of fruits and vegetables would bring about a more balanced tissue pH, which in turn would favor an anti-inflammatory condition throughout the body. The production of pro-inflammatory cytokines is essential to the inflammatory response. However, overproduction of these chemicals may be detrimental. The omega-3 (n-3) polyunsaturated fatty acids suppress inflammation by decreasing the production of pro-inflammatory cytokines. 6) Some sources of n-3 fatty acids are flaxseed oil, green, leafy vegetables, and cold water fish such as salmon, sardines, and mackerel. (7) Omega-3 fatty acid works by decreasing the release of arachidonic acid, a pro-inflammatory substance, from cell membranes, and by competing for the same enzymes that generate highly reactive inflammatory chemicals. (3) In addition, supplementation of the diet with n-6 oils was found to be effective in reducing pain and sweeling in patients with rheumatoid arthritis and has been shown to be effective in the management of eczema, pms, mastalgia, and multiple sclerosis. 8) Some good sources for n-6 oils are evening primrose and black currant seed oil. Free-radicals (oxidants) are very reactive and unstable molecules that can cause damage to proteins, fats, cell membranes, and DNA. (10) When free-radicals attack, for example cell membranes, the remnants of the cell then become â€Å"information† for neighboring cells to begin the inflammatory process. (3) Thus, oxidation by free-radicals can pose a serious problem to tissues. Antioxidants, therefore, are needed to protect tissues from being destroyed by free-radicals. Essentially, polyunsaturated fatty acids in cell membranes are attacked by oxidants, thereby producing even more potent free-radicals. But, in the presence of antioxidants, these free-radicals can be reduced to a more stable and unreactive form, thus sparing other cells from damage. (7) Some important antioxidants are: Vitamins C and E, and the minerals zinc and selenium. Since many antioxidants work at different biochemical junctures, a broad spectrum approach to antioxidant therapy or supplementation should be followed. In addition, concentrated food extracts such as ginger, curcumin from tumeric root, and bromelain from pineapple can help attenuate skeletal muscle injury by modulating the inflammatory event. (11) Foods which contain copious amounts of antioxidants are: garlic, onions, carrots, green vegetables, broccoli, Brussels sprouts, cabbage, cauliflower, tomatoes, and citrus fruits. In addition, red wine and grape juice contain phenolic compounds that provide protection against heart disease, cancer, diabetes, and hypertension. (12)

Effects of YPF Nationalization Research Paper Example | Topics and Well Written Essays - 1000 words

Effects of YPF Nationalization - Research Paper Example The nationalization has also severed Argentina’s social relations with other countries that threatened to impose stringent political and economic sanctions on Argentina. Nationally, the social effects of the nationalization include an increase in the amount of taxes paid by Argentines (Cassidy, 2012). The government is also restricting currency flight, which is growing at an alarming rate as more and more Argentines lose faith in the country’s economic prospects. As a consequence, Argentines continue to encounter immense restrictions, particularly with regard to making investments. The Argentine President infuriated Argentina’s allies such as Spain but also won the favor of a massive portion of Argentines who consider the expropriation of Repsol as serving Argentina’s interests. The Argentine government’s decision to wrench control from Repsol continues to instigate fear amongst Argentines, as well as other people in the region. This is largely beca use YPF is a prominent company, which contributes substantially to the economy of South America. Therefore, other South American countries are bound to be adversely affected by Argentina’s move to nationalize YPF. As a consequence, these nations are likely to consider the Argentina government as irresponsible with the country’s and region’s wellbeing. ... In essence, the nationalization of YPF will cause detrimental effects to the government’s capacity to provide its citizens with proper social services. On the other hand, Argentina is likely to suffer fuel scarcity as a consequence of the nationalization. This is because the country does not have the capacity to explore its vast oil and gas resources. Oil and gas scarcity will, in turn, result in increased living costs on the people of Argentina. Effects of the Nationalization on society in Argentina The nationalization of YPF serves to move Argentina back to the status of a net energy exporter while at the same time having immense sovereign power over the country’s energy industry, as well as natural resources. This perception towards the effects of YPF’s nationalization on Argentina’s social environment is quite distinct from the former signals, which indicated that the Argentine government was moving towards a wholesome nationalization of the countryâ⠂¬â„¢s oil and gas resources. As a consequent, the nation recognized that it its domestic investor pool was quite inadequate, and the country seriously required foreign expertise, as well as foreign investments to enable it tap its energy resources (Romero, 2012). This was especially the case regarding Vaca Muerta’s immense shale oil and gas reserves. In essence, all these moves signify Argentina’s growing appreciation for its sovereignty both socially and economically as the country is no longer afraid to invite a clash with other nations in its fight for its rights. Reception YPF’s nationalization was warmly welcomed by Argentines who thought that the government could have expropriated 100%, not just a portion of it. Most Argentines believe that the

How sex, gender, and race are all social constructs Essay

How sex, gender, and race are all social constructs - Essay Example A critical analysis of her argument is presented in this paper. My stand here is that I agree with Dr. Warnke that race or ethnicity is a social construct, but I totally disagree with her that sex and gender are social constructs. To start with, it is important to put forward the difference between sex and gender. The two terms have different meaning and the meaning of each borrows from different theories characteristic of feminist theories. The term sex refers to male or female based on biological features. On the other hand, the term gender denotes men and women as defined by social factors. However the extent to which the society meets its definition for gender is based on diverse and dynamic considerations, such that gender aspects will vary from one society to another (Warnke 156). Natural or biological treatment characterizes the analysis of these two terms. That is, sex and gender. From gender and sexual studies videos, all persons are categorized to both sex and gender. Also, that is the same case with race or ethnicity. People actually pass as members of a given category. For instance, actors in any given piece of art may take a given character that depicts belonging to a certain race or ethnicity. On the same note, it very hard to come by an actor who will take on the role a different sex or gender different from which he or she is in actual sense. The only time this happens is when such pieces of work are meant to portray transgender motives or situations or in the event that such works need to present a sense of humor. When such an observation is made, it is important to note that the observation is temporary and therefore does not last for long. The motive by which the observation is made is only confirmed or evidenced with such observed scenario. What this shows is that people or the entire human race will identify itself with a given social organized group; that is, a race or ethnic group, but rarely will the same people practice transgender role s. Therefore, sex and gender fails to be integrated as a social construct as presented by Dr. Warnke. However, race or ethnicity as a social construct is in line with her claims (Warnke 178). To a more analysis of the claims of Dr.Warnke, gender as a social construct may hold true only if she provides enough evidence. Although at many instances gender is more tailored towards being a social construct, Warnke fails to integrate her claim into evidence that properly asserts her claims. As a result, this paper seeks to disagree with her opinion and claims. The integral assumptions and argument in that case elicit doubt and skepticism, and therefore her conclusions about race, sex and gender cannot be upheld. People are born and integrated into specific social settings, thereby determining their ethnic and racial backgrounds. These people are born either male or female or hermaphrodites by sex and the gender aspect of it sprouts out of the fact that they are male or female. Dr. Warnke a rgues that it is the society that builds up the gender side of human race and ethnicity, but fails to provide sufficient evidence to this claim. There are varied believes developed by the society based on male-female and sex-gender roles, but all that is basically based on whether one is male or female. Further to this treatment, the

Labor Laws and Unions Essay Example | Topics and Well Written Essays - 750 words

Labor Laws and Unions - Essay Example AT&T purchased Bell’s assets and became the mother company of Bell in 1899. In 1927, the company launched long distance telephone service to London by use of two way radio. AT&T legally operated as a monopoly in the United States until 1984 when it settled a civil antitrust suit with the Department of Justice. This led to a split of the company and it was later restructured in 1995. AT&T remained a communications services company (www.corp.att.com) The company faces legal issues and obstacles such as copyright and illegal software dissemination actions. AT&T also faces the risk of security breach that is unique to m-commerce. Additionally, the company faces legal liability in cases regarding infringement of privacy, discriminatory acts and abuse of the market. The company, in its operation, could break several federal laws including, but not limited to the Communications Act of 1934 and the Telecommunications Act of 1996. The Communications Act of 1934 transferred regulation o f interstate telephone services from the inter-state commerce commission to the federal commerce commission. The Act aims to establish rapid, efficient, national and global wire and radio communication. It also requires these services to have adequate facilities at reasonable charges, for the purpose of the national defense. The Act set up a legal framework for regulating wired and wireless communication globally. It enabled the government to regulate new media technologies such as television and mobile phones. The Telecommunications Act of 1996 which was an overhaul of America’s telecommunications laws repealed sections of the Communications Act of 1934. The Act included internet in broadcasting and spectrum allotment, and allowed media cross ownership. It made the communications industry more penetrable as it let anyone enter any communications business. The Act mainly deregulated the broadcasting market. It opened markets to competition by reducing regulatory barriers. To minimize possible litigation, the company should acquire necessary licenses pertaining to its operations. Secondly, it should abide by structural regulations such as open access. Thirdly, it should eradicate discrimination rules. The company should also refrain from abusing market power. Additionally, it should take heed of antitrust law and provide consumers with security they require when using the company’s services. Part II The Communications Workers of Americ

Tectonic work on Troppo and Glen Murcutt Essay Example | Topics and Well Written Essays - 1500 words

Tectonic work on Troppo and Glen Murcutt - Essay Example Tectonics was developed in response to a discussion set by Phenomenology. The idea was mainly used as a means for criticizing the modern technology. Tectonic architecture forms parables to other building constructions, and corresponds to values other than a scientific conceptual sphere. Tectonic architecture uses techniques of bearing structure to develop associations and Experiences1. Tectonics of industrial production and cultural Mass-production has led to building culture giving reputation to general standards and homogeneity to satisfy the final customer. With the computer era, the Computers have changed the means of working with building projects and architecture during the past. Troppo and Glen Murcutt are two architects whose work has been based on tectonic designs and one cannot fail to admit that they have some of the most outstanding designs from this form of architecture. Murcutt tectonic architecture Glenn Murcutt is one of the most famous people when it comes to the stu dy of architect designs on the tectonic platform. One cannot fail to recognize the talent bestowed upon him from his designs. One of his early designs in the late 1980’s that intrigues me by its simplicity yet remains to be an explicit design is the "Ball-East away House", at Glenore, Sydney2. This was a single story house with a beam platform. The house was made entirely out of steel frame with its side walls having timber. This is considered to be one of the greatest buildings to be ever designed in its time. An ordinary individual may fail to see the beauty behind the designed, but as architecture, every inch of the house designs is superb. Glenn had tectonics design in mind when he took his time to design the house. To begin with, Glenn has always had a tradition of using lightweight materials that would allow the design to come out alive. This is because lightweight materials are easy to bend to fit the design. Glenn uses corrugated iron sheet roof top because it would b e easier to form the curved roof structure. This aside he uses wood for the walls and floor because wood is light and easier to deal with as opposed to concrete, bricks or stones. Tectonics is all about merging ideas. Glenn constructs a modern design in a rural area and to ensure that the house is safe from natural forces such as water, the floor is raised and made of wood. In this design, Murcutt manages to blend in myriad details that make the final product a wonderful piece of art. This was a very nice building. Another of Glenn’s greatest tectonic designs of all times is that of the Magney house. This is one of the buildings that he explores the use of mass as an option based on the landscape. Murcutt has always used lightweight materials because they are very easy to work with and they create space even on very small lands. However, in the Magney house, he needed to create some caving and that made the use of mass necessary because they are larger. Their size gives room for play as opposed to thin materials. Glenn takes pleasure in playing with mass and light weight. In the Magney house he creates the cave by using mass for the walls and uses steel frame for the roof plane. This creates the sense of a floating roof3. In the sitting room, Glenn purposes the house for shelter and prospect by making it abstracted. He uses a parasol roof with clustered spaces taking the form of caves and a stretched plain flour. A similar design to this was that of the Laurie short

Professional Development as a Strategic Manager Essay

Professional Development as a Strategic Manager - Essay Example c management study: the first makes stress on the meaning of the strategic management concepts, the second focuses on the process and important factors. The essence of the decision making in strategic management is perfectly explained by the following citation: The role of strategic management in the organization should not be underestimated as it is very important. The issue is worth-discussing; therefore, in the given paper I would like to discuss my professional development as a strategic manager and prove that I can build the long-term business strategy for the company British Airways taking into account the organizational change in the new rapidly changing market conditions. Now leadership ideas get new sense in the transportation industry; leadership is thoroughly investigated from the theoretical and practical points of view. It is obvious, that transportation industry requires gifted leaders as any other, however as far as transportation sector has special characteristics, and is focused on offering the clients distinctive services, leadership in this industry can’t be considered as universal. Nevertheless, leadership ideas of other successful companies can be applied and adapted to the sphere of transportation business. Shelley Kirkpatrick and  Edwin A. Locke  (1991) state that "key leader traits include: drive (a broad term which includes  achievement,  motivation, ambition, energy, tenacity, and initiative), leadership motivation (the desire to lead but not to seek power as an end in itself), honesty, integrity, self-confidence (which is associated with emotional stability), cognitive ability, and knowledge of the business. According to their research, "there is less clear evidence for traits such as charisma, creativity and flexibility". Though transportation industry is considered to be the one, where many leadership initiatives can’t be completely appropriate and almost certainly requiring other methods, however leadership is still very

Finance and Accounting Homework Essay Example | Topics and Well Written Essays - 1500 words

Finance and Accounting Homework - Essay Example Cost is a crucial aspect, and it facilitates realization of defined results in verifiable and objective amount. The matching of this accounting concept is usually facilitated in order to ensure that there is an accomplishment of radical goals within the depreciation expense parameters. Lump sum purchases should be treated in a way that plant’s asset useful life is well analyzed in a way that reflects all the revenues imperatively in the income statement (Tsuji & Fujibayashi, 2011). Purchases that the organization exercises should be subjected in going concern assumption. This is in order to ensure that there is attainment and realization of integral goals as per the laid down accounting and finance principles and policies in the organization. Revenue recognition principle in many scenarios usually limits an organization from reflecting on mechanisms of holding any asset from the plant. Cost principle should be differentiated in various ways in accordance to the equipments in t he organization (Tsuji & Fujibayashi, 2011). 2 Factoring is an important approach in every organization cash flow spheres. Company management can opt to sell all its accounts receivable to the third party at a discounted manner for the sake of exchanging money. The third party in this case is usually any financial institution or bank. The third party which purchases all accounts receivable has to remain significant and resourceful in order for all the transactions to be viable and beneficial. Receivable factoring has been posited as a simple commercial financing (Khazeh & Winder, 2006). When a company chooses a given option the management needs to articulate on analysis of the important factor. There are various factors that should be reviewed routinely accounts receivables. Accounts receivable needs to articulate on measures on how a company can convert cash on hand. Most business entrepreneurs have business ideas that turn accounts receivables into cash (Khazeh & Winder, 2006). Th ere are various types of reasons through which company implements receivables in its accounting books. Therefore, it is usually looked as an effective asset to investors and investors. Organizations articulate on ways through which accounts receivables can be converted into cash without causing problems to business progress. Organizations have been articulating on various types of conversion that are used for implemented balance sheet. Managers in these organizations always analyze receivables in comparison with small business owners (Khazeh & Winder, 2006). 3 A contingent liability has been a potential liability, and it wholly depends on a future event that occurs. In accounting and finance, a contingent liability and loss are usually recorded through the use of journal entry approach especially where contingency is estimated and probable. There are three examples of contingent liabilities known as the lawsuits that are filed against a company, warranty of the organization and guar antee of another party’s loan (Colquitt, McCullough & Sommer, 2011). Circumstances whereby a liability and also related contingency are possible (not probable) a journal entry for the event is usually not required. Disclosure is not required in this case scenario. In approaches whereby a contingent liability has been proved to be remote, both the disclosure and the journal are not required in the accounting activity. A

A Critical Analysis of Examination in Assessing Psychology Students at Coursework

A Critical Analysis of Examination in Assessing Psychology Students at University - Coursework Example Students are assessed for a variety of reasons such as for motivation of students, producing learning opportunities, enabling feedback to students and teachers, grading and for improving quality of education provided and institutions (Rust, 2002). Teachers design assessment and examination techniques to facilitate learning of students and give feedback of the conduct of the students during the course. It is essential to fully understand the real purpose of assessment and the assessment method used should be critically analyzed and evaluated, for the assessment technique to be effective in achieving its purposes. As according to Broadfoot, â€Å"Assessment is on the agenda because change is on the agenda; because there is growing pressure in many countries for the education system to do more and different things; because it is felt that assessment is key to achieving these changes†. This paper identifies the purpose of the assessment and indicates what should be assessed. It fu rther analyzes the attributes of an efficacious assessment. There are more than one examination methods used in assessing students at educational settings, and this paper analyzes those methods and further describes the strengths and weaknesses, and advantages and disadvantages of the examination method to assess the students. ... Assessment of examination can include giving grades as a part of it, but it does not limited to this act. It is a subjective process of evaluation as well as objective one (Rust, 2002). The main purpose of assessment of students is the most important consideration before analyzing and evaluating the assessment and examination methods. Assessment through examination is considered as a dynamic process having multiple aspects and diverse intentions. Such diverse intents include providing the examination criteria on the basis of which students are graded and promoted to next higher level. In assessing students, proper feedback is enabled so as to highlight the quality of student learning, and also teachers are capable to evaluate the the extent to which their teaching is effective. The assessment through examination method is crucial in maintaining academic standards (Brown et al., 1996). The deep understanding of purpose of assessing students facilitates the teacher in establishing a mo del which defines the assessment method to use in particular educational setting. But before moving to that step of developing assessment framework, the facets of student learning that are to be assessed or examined should be considered. The assessment content majorly depends on the course objectives as both of these assist to achieve the same educational goals for student learning. This is the basic element of an effectively-designed curriculum. The extensive classification of educational and learning objectives covers three critical areas that are knowledge, skills, and attitudes. For the knowledge domain, Harden has illustrated that cognitive measures are addressed by knowledge objectives (Harden, 1979).

Marketing Case Analysis Article Example | Topics and Well Written Essays - 750 words

Marketing Case Analysis - Article Example In order to be able to accomplish something within the worldwide marketplace today, the organizations sales force depends more upon on attaining the precise consumer and product information, it does not really matter if it is inside the organization or outside .the organizations sales force requires a cohesive, prearranged technique to follow the consumer leads, the contact information, in addition to their descriptions. Along with this the management within these organizations is on the look out of a technique where they would be able to investigate in detail the past sales data for the future prospects. If an organization is able to consolidate the data storage along with regulating the sales tools also practices, the organizations contending within this atmosphere would help the organization respond swiftly to the changing consumer inclinations and alterations within the market place, routinely guiding the way to the sales staff plus push them follow up. Also to be able to recogni ze a lot more prospects to cross sell and up sell, a lot more efficiently estimate sales figures, focus upon refining the sales relationships .It is suggested that organizations can in fact now automate their sales force in order to guarantee that their sales are closed quickly. (Microsoft .com) Also it seems that what Sprint is going through now, is a situation where, they are striking their numbers. Thinking how many more follow up calls have been made until now. These issues are persistently being obsessed into the heads of the sales team.( Keith Rosen , 2008) What is notable is the fact it is true for a lot of sales professionals, that the pressure to arrive at quota or else achieve a definite level of performance. At the same time as retaining a monthly sales objective helps only to settle the mind upon the reward which is why the actual focus upon the result can actually mean more harm. By the end of every selling month, the disturbance along with the pressure can actually overpower as the salespeople move quickly to perform at the optimum to close the sales in order to accomplish their targets. ( Keith Rosen , 2008) Because while the act of selling is considered by most as the transmission of the sentiment behind the product or service. One can visualize the mind-set that these over pressurized sales people are conveying to their prospects. The constant worry in addition to the apprehension of having to close additional sales unintentionally puts unjustified strain on the prospects as well as cultivates a detrimental association from the beginning. ( Keith Rosen , 2008 ) To produce improved results, it is recommended that they modify the way they are closing these sales at Sprint or modify how they perceive the whole situation. Also in order to recurrently go beyond the organizations sales goals as well as better supervise the team's outlook, amending the way they think, so in order to grow to be procedure driven relatively than just being outcome driven. The probability is that the, salespeople who are exclusively alert on the end product lack the procedure within they would believe. Moreover, they put more efforts in trying to be in charge of the result; approaching for what they yearn for

Three Presidential Administrations Essay Example for Free

Three Presidential Administrations Essay I have chosen three presidential administrations that to my opinion had the greatest impact on the development of the American nation. These are the administrations of Theodore Roosevelt, Woodrow Wilson and Franklin D. Roosevelt. I am going to demonstrate that these administrations shaped America’s political, economic and financial model as well as laid the foundations of its modern foreign policy. I am going to consider the three administrations separately, and compare and contrast them in the conclusion of this paper. Theodore Roosevelt (1901-1909) Roosevelt’s presidency marked the beginning of the XX century for America with a completely new style of administration. As a steward of the people Roosevelt introduced a new idea of a president as a mouthpiece of the public good. At that he aimed to turn the government into an organizing power and arbiter of the national economic forces, including both large capitals and workers. Striving to provide fair competition in the national economy Roosevelt became known as a â€Å"trust buster† when he aggressively pursued the enforcement of the Sherman Act. On the other hand he declared the need for social reforms and social partnership that were necessary in order for capitalism to survive in America thusly laying grounds for modern American socioeconomic model. It appears that Roosevelt has not distinguished social and environmental issues that are viewed separately in our times. Although being a passionate hunter, he fostered major nature-oriented measures including significant increase of the national forests area and major irrigation projects. A link between social and environmental matters can be found in Pure Food and Drug Act that has been passed during Roosevelt’s presidency. Roosevelt was extremely concerned with public health believing that nature protection is a part of social policy. In the international arena Roosevelt made America both and active player and an arbiter for international disputes. He placed Panama into the range of American interests and increased the US influence in Central America by allowing construction of the Panama Canal under US control. As a mediator in the international disputes he intervened into the conflict between Venezuela and European nations with a proposition to settle the conflict in the International Court of Arbitration, and, most remarkably, mediated during the peace talks between Japan and Russia in 1905 that contributed greatly to America’s global prestige. It can thus be observed that Theodore Roosevelt’s presidency marked the beginnings for establishment of both US home policies in the social, economic and environmental fields and foreign policy as a global player and a global arbiter. Woodrow Wilson (1913-1921) Just like Roosevelt, Wilson believed that a president should first and foremost act as a representative of the people. And, just as Roosevelt, Wilson continued the course for establishment of partnership between large capital and the society. In order to normalize national finances he persuaded two major measures. Firstly he won the Congress support for Underwood Act that decreased overall tariff and eliminated tariff for such items as steel and wool, as well as established the Federal income tax as a unified basis for national taxation. Secondly he succeeded in passing the Federal Reserve Act providing the nation with the necessary supply of funds. Financial reforms were followed by social ones. In 1916 a new law prohibited child labor and limited the length of the working day to eight hours for some categories of workers. Yet some of Wilson’s measures in the social sphere are at least controversial. This includes his support to official segregation in the universities and state offices that has been finally eliminated only half a century later. Not less controversial was Wilson’s foreign policy. Having won his second elections as a â€Å"man who protected America from war† he still caused the Congress to declare America’s entry to the European conflict making WWI really global. Arms contract resulted in economic boost, while Wilson’s position during the subsequent peace talks was a major factor that produced interwar global order, including foundation of the League of Nations. Perhaps Wilson frankly strived to make WWI a war that would put an end to all wars and it is not the fault of his administration that the Versailles system collapsed in twenty years. Franklin D. Roosevelt (1933-1945) F.D. Roosevelt is literally a person to whom America owes its present influence and prosperity. He became a leader of a nation that experienced dramatic economic and social crisis and has been withdrawing to isolationism from the rest of the world. By the end of his presidency America was the mightiest economy of the leader of the western nations. In the sphere of home policy Roosevelt demonstrated how state interference can contribute to economic revival, while in foreign policy he managed to win wars before first shots were made. Roosevelt’s â€Å"New Deal† provided relief to the tens of millions of the unemployed by canalizing this potentially dangerous energy to the national projects like highways construction and working in the rural areas. Such new bodies as Federal Emergency Relief Administration, Civilian Conservation Corps, Public Works Administration and Agricultural Adjustment Administration were designed as state bodies that were to organize the unemployed to perform public works thusly providing them with jobs and salary. Roosevelt’s financial policy was more contradictory, including confiscation of privately owned gold and securing of economic growth by major loans that dramatically increased the national debts. Although the economy has been partially recovered, America was still too weak to play a decisive role in the global policy at the eve of the World War II. Roosevelt’s administration was extremely successfull in combining economy and foreign policy. The land-lease program advocated by Roosevelt both provided outstanding economic growth and allowed America to shape the course of the global war by economic and financial means. Whether Japan would attack Pearl-Harbor or not, America was already participating in the war as non-belligerent ally of Great Britain and USSR. Roosevelt championed in raking up the fire with the hands of the others, and in 1945 America was the only among Allied nations that has not suffered military devastation and whose economy allowed it to set the tone during peace conferences. Although Roosevelt died before the war was over, it was his effort that made America the only real winner in the World War II. Concluding the paper it can be observed that each of the three mentioned presidential administrations had to deal with similar problems and proposed similar solutions. In the home policy this included major economic and financial reforms that were to ensure the social development of America, while in the foreign policy this was a race for global leadership eventually won by the USA. Although Theodore Roosevelt demonstrated commitment to free economy and his homonym used state intervention to the economy, and although the views of America’s place in the world differed from Wilson to F.D. Roosevelt, their basic course was the same. It included establishment of socially oriented competitive economy and promotion of America to the position of the global leader and arbiter.

Uber Business Model Analysis and CSR

Uber Business Model Analysis and CSR Part 1 Founded in 2009, Uber is a web-based transportation network company headquartered in San, Francisco, California. It offers a taxi-replacement technology platform that connects driver-partners with riders via a location-based app and operates in over 60 countries around the world. As the first ride-sharing business, it has become the term used when describing the service. South Africa is a challenging market to enter because of economic divide, national pride, and high crime. Ubers core competencies are its brand name and reputation from being a first-mover and a corporate culture created from effective talent management that drives entrepreneurship and innovation. This has allowed the young company to effectively organize drivers and vehicles it does not own. By being the first web-based transportation network, Uber has a competitive advantage over similar companies as a first-mover. As a first-mover, Uber has been able to understand its business model, customer problems, and the fast pace of technology. This has given them the ability to be both proactive and reactive to solving issues in a rapidly changing environment. Uber had a three-year head start in the market and took full advantage of it. Its first-mover advantage is firm-specific and used maintain its competitive edge to prevent fast followers from catching up. It has a bold history and used a beg for forgiveness rather than an ask for permission strategy to enter the market. The taxi industry is highly fragmented, deeply regulated and mostly stationary in terms of innovation. It realized consumer frustration with the status-quo taxi industry and solved the problem by building a disruptive business model to execute an aggressive strategy and apply innovation to provide immediate relief to the chaotic situation. Professors Henrich Greve of INSEAD and Marc-David Seidel of the University of British Columbia studied the role of how being a first-mover played in overall success. The two professors realized that first-movers typically had an advantage over rivals, even with an inferior product or service, because they learned from mistakes and became better over time (Greve Seidel, 2014). Only eight years old, Uber is a young company, but has already become a well-recognized brand. Its brand name has become a verb, synonymous with the online ride-sharing service. Ubers name recognition as a first-mover produces loyalty among current customers and attracts new customers to its service even before other firms have entered the market. As a first-mover, Uber benefits from economies of scale and a vast network of established stakeholders and resources (drivers, customers, employees, technology, capital, etc.), which allows it to increase efficiency and decrease cost s. Its first-mover advantage allowed the company to learn rapidly and obtain large amounts of data to create customer-driven marketing strategies, labor specialization and industry cooperation. Because of a longer learning curve, it can create customer value, drive down prices and implement more cost-efficient techniques into its business model. Uber is a cut-throat corporation with a large war chest. Founded in 2009, it is now worth around $70 billion and is the worlds most valuable startup company (The Economist, 2016). Its capital, gained from being a first-mover, allows the company to expand faster and take risks its competitors cant afford to. Uber established itself as tech firm and not a transport company, which allowed it to expand globally and bypass taxicab regulations. If it is not able to enter a specific market because of extensive regulations it implements capital-intensive battle strategy. Uber has been able to spend billions on aggressively fighting and disrupting ta xi industries around the world. It also has spent large amounts of money to boost innovation, diversify its business, and lock in strategic relationships with governments and other businesses. Its first-mover advantage has also been able to attract and retain the top talent shaped that has been able to shape its corporate culture. In business, culture is important because it attracts talented and skilled individuals, increases employee productivity and operational efficiency, and improves quality and reputation. Ubers culture is a core capability and firm-specific because it uses a highly paid, extremely motivated and specialized workforce who keep the companys mission at heart. The company created a customer-centric and data-driven culture that promotes creativity and encourages passion. Its culture is based around value creation and uncovering This culture was created from its differentiating brand identity, which allowed it to capture and preserve a dynamic group of top talent. Its first-mover advantage, cool image and unique brand identity has created a staff of intrapreneurial millennials by attracting and retaining a workforce of intelligent young talent from all over the world to create its dynamic and innovative-driven. Most of Ubers employees are between the ages of 25 and 35. It is also one of the fe w companies in Silicon Valley that hires large amounts of employees with PHDs. Its business model is driven by its culture and has earned it a reputation of providing an enhanced user experience, translating to higher customer satisfaction and increased revenue. Its corporate culture has led to great innovation and Ubers pioneering technology with its verified drivers and cars, its dual-rating system that improves customer satisfaction and user confidence, and has allowed Uber to deliver a premium level of reliable service at an affordable rate. Its intelligent and aggressive culture created the atmosphere to bypass high barriers of entry into the taxi industry. To promote itself, the ride-sharing technology company creates strategic partnerships and uses great advertising and marketing campaigns to promote itself, which has resulted in the companys high visibility and customer awareness. and an unlimited fleet of partners and vehicles has made it a global player in the market. Uber used its strong transferable international brand to enter and disrupt the South African taxi industry. The company implemented its brand and leveraged its current business model into the country by adding programs to address the issues it would face. Ubers brand had the chance of suffering from location disadvantages in South Africa because of high crime and unemployment rates, but Uber was able to address these key issues early on, before they had the chance to hurt its intimable brand name and reputation. It improved safety features concerning its service. In South Africa, all drivers had to be verified and an annual follow-up was required to protect users. In South Africa, public transportation was slow and inconvenient. It low cost attracts mostly poorer citizens. There are safety concerns with the taxi services in the country because of high crime and taxi turf war. This issue is increased because taxi drivers only accept cash payments. Ubers main coemption will be against Zebra Cabs, a South African metered cab service South Africa is a technological country where most citizens are technology-savvy. Uber used its disruptive technologies to enter the country by adapting and offering technology that catered to local needs. Uber uses great technology to bring riders and driver partners together. Africa has a huge potential market for Uber and South Africa is the most economically developed country on the African continent Part 2 Corporate Social Responsibility (CSR), With the rise of technology, the world and the business environment has become more globalized and transparent. Multinational Corporations (MNC) compete in a global arena. In the realm of rapidly moving business environments and an increased rate of globalization, the concept of Corporate Social Responsibility (CSR) has become more significant and apparent. The society of the world has put substantial pressure on these global firms to make them responsible for activities and actions. CSR can be simply summarized as doing the right thing. It is concerned with how the activities of firms have an impact of the fundamental, economic, and social impact on society. Still a relatively young subject, CSR Kim Kercher examined History, Research and Writings on CSR The concept of corporate social responsibility is a relatively young subject matter, mainly a product of the 20th century, especially the last 70 years. Its roots can be traced back centuries further, but formal writing on the subject has been a product of recent times. Archie B. Carroll traced the evolution of modern CSR back to 1950s (Carroll, 1999). Before the 1950s, CSR was referred to simply as social responsibility (SR), possibly because these periods preceded the era of corporate influence and dominance. The contemporary idea of CSR was established by Howard R. Bowen, known as the Father of CSR because of his early and influential work. In his landmark book Social Responsibilities of the Businessman, Bowen believed that the worlds largest businesses were vital centers of power and decision making and the activities of these specific firms affected the lives and aspects of many (Morrison Bridwell, 2011). In his 1953 publication, Bowen argued that corporate responsibility encom passes more than following the law and reaches beyond a legal scope. Bowens social responsibility doctrine explained the responsibilities businesses owners had and how they must protect humanity from the harmful side effects of certain business activities by implementing policies and rigorously following them. The 1960s were significant in the history of corporate social responsibility. The depth of CSR began to expand in the 1960s as one of its first and most influential writers, Keith Davis (1960), defined social responsibility as businessmens decisions and actions taken for reasons at least partially beyond the firms direct economic or technical interest and that being socially responsible would pay the company back in the long run, through an increase of economic gain. In his piece, the Iron Law of Responsibility, Davis observed that businessmen were more worried about profit and immediate economic interests than they were about other important subjects. He broadened the thought s of Bowens Social Responsibilities of the Businessman by stating that social responsibilities of businessmen need to commensurate with their social power. Davis argued social responsibility should consider the environment and other issues regarding public welfare issues and that the power of corporations must continuously be checked by social responsibility. The term CSR was first used in the 1970s and became widespread due to globalization. Core Characteristics and Benefits According to Sen and Korschun, CSR is driven by stakeholder relations, social obligations and marketing (Sen Korschun, 2006). Every firm is responsible and held accountable to its stakeholders. In spite of many efforts to create a clear and impartial definition of CSR, there is still no universally correct definition for the concept. While the fundamental features of CSR are visible in the practice and remain the core characteristics of the concept, hardly any definition includes them all. Aminu Ahmadu Hamidu, Harashid Md Haron, Azlan Amran (2015) state that corporate social responsibility has six characteristics: Voluntary, Internalizing or Managing Externalities, Multiple Stakeholder Orientation, Alignment of Social and Economic Responsibilities, Practices and Values, and Beyond Philanthropy. Strategic CSR Corporate social responsibility has become a standard business practice in the business environment, even more so for multinational corporations. CSR has been implemented into global branding and is the core of many business strategies in order to promote long term growth. Jevons and Polonsky (2009) believe that todays multinational corporations must view CSR from a strategic view within the global arena. With an advance of technology and faster communication channels, consumers are more aware on world and business events. Studies have shown that the ethical conduct of firms has a great influence on the purchasing decisions of consumers. In an investigation by Environics International, more than twenty percent of consumers stated their purchases were companies based solely on how they perceived the business (Mohanty, 2008). With increased interest from customers and other stakeholders (employees, suppliers, investors, communities, and activist groups), there is a growing demand for g reater disclosure. Because of this, organizations and the individuals within them must consider its complexity and explore it to better understand how it is related to branding strategies. Because these multinational firms operate in several business environments, they must be able to relate each set of responsibilities at numerous points, encompassing a variety of company activities (Valor, 2007). Strategic CSR is used to help firms achieve a positive impact on society while maximizing the shared value for all the organizations stakeholders. The notion of share value creation derived from Professor Michael Porters theory of competitive advantage (Porter, 2011). This theory suggests that firms need a structuralist view to create a strategic share value for competitive thinking. By implementing this strategy, firms are able to defend themselves against competitors. Firms use strategic CSR in the daily operations of the firm and is central to the activities of the firm value creation system.ÂÂ   Werther and Chandler (2005) examined several multinational companies and found out that global brands are often central to competitive strategy and work by guaranteeing consumers are provided the best in quality, consistency, and security. By delivering customers guarantees, these brands can reduce costs while increasing profits. Studies have discovered the positive effect of CSR practices on profitability and other performance measures (Goyal et. al, 2013). The publics expectation of firms is that they will function in humanitys best interests. With the rise of technology and social media, the importance of CSR is intensified. David Woods studied the correlation of revenue and CSR and found out that CSR is not only ethical, but profitable, especially in regards to long term gains (Woods, 2011). Woods wrote that studies have shown that organisations that had a genuine commitment to CSR substantially outperformed those that did not, with an average return on assets 1 9 times higher. Kellie McElhaney (2007) believes that CSR is more of a strategy than a concept. McElhaney does not believe that CSR is a remedy to the problems that affect the planet, its inhabitants and the global business environment, but a practicable and essential element of overall business strategy. McEkhaney believes to be more effective, strategic CSR needs to be aligned with the core business objectives and core competencies of the organization. Matthews (1982) believes that corporations are not monolithic entities, but organizations administered and controlled by individuals and attached in the societies in which they operate. Because of this aspect, CSR must reflect the human element of firms and contribute to their communities and overall society. Impact of Globalization on CSR Professor Roland Robertson defines globalization as the compression of the world and the intensification of consciousness of the world as a whole (Robertson, 1992). Consumers are no longer restricted to their smaller-scaled home markets and now have access to a vast international market. Globalization, especially for multinational corporation, brings more opportunities and benefits, but also creates ethical issues and other problems when dealing in foreign countries. CSR covers a wide range of interests and the rapid rate of globalization has led certain corporations and developing countries to become significant players in the world economy. However, developing countries with emerging economies have critically encountered an abundant amount of issues (religious, governmental, social, cultural, environmental, etc.) Rhys Jenkins (2005) studied the effects of globalization on CSR and its influence on society. Jenkins notes that the present movement and concentration of global CSR today dates back to the early 1990s. This movement led to the international rise of CSR, global deregulation, the creation of development agencies, increased foreign investment, and the reduction of poverty, but played a major part in the shrinking role of national governments. With globalization and corporate responsibility intertwined in an increasingly competitive market, the influence and responsibility of business firms is increased while the control of governmental bodies is reduced. Historically, national governments depended on regulatory measures to bring societal and ecofriendly purposes to the business sector. Verma (2015) claims that dwindling government resources, combined with a suspicion of regulations created a search for voluntary and non-regulatory initiatives which reduced the power of governments. Scherer and Palazzo (2011) assert that it is crucial to shift towards a larger, politically-centric concept of CSR, especially in a globalized world. Because of globalizatio n, the authority of national governments is getting weaker when it comes to regulating the activities of global firms. Governments around the world are in a constant battle (and race to implosion) with other countries in order to win the competition. Corporations must practice morally and promote ethical decision making standards in order to avoid political conflict and the societal consequences. Global firms are not only responsible of their in-house activities, but also for the activities of their suppliers and partners. Due to an exploitation of child labor from its suppliers, Nike faced a global consumer boycott and had to make extensive enhancements in the working environments of its various supplier plants (Brause, Locke and Qin, 2007). While some activities and practices may reduce costs and legal in some parts of the world, partaking in these unethical business practices may be considered immoral and damage the publics perception of the company. The Future of CSR Bowen, H.R., 2013. Social responsibilities of the businessman, Iowa City: University of Iowa Press. Hamidu, A.A., Haron, H.M. Amran, A., 2015. Corporate Social Responsibility: A Review on Definitions, Core Characteristics and Theoretical Perspectives. Mediterranean Journal of Social Sciences, 6(4). Jenkins, R., 2005. Globalization, Corporate Social Responsibility and poverty. International Affairs, 81(3), pp.525-540. Locke, R.M., Qin, F. and Brause, A., 2007. Does monitoring improve labor standards? Lessons from Nike. ILR Review, 61(1), pp.3-31. MacMillan, D. Demos, T., 2015. Uber Valued at More Than $50 Billion. The Wall Street Journal. Available at: https://www.wsj.com/articles/uber-valued-at-more-than-50-billion-1438367457 [Accessed February 21, 2017]. Matthews, J.B., 1982. Can a corporation have a conscience?, Boston: Graduate School of Business, Harvard University. McElhaney, K., 2007. Strategic CSR. Sustainable Enterprise Quarterly, 4(1), pp.1-7. Morrison, E. and Bridwell, L., 2011, January. Consumer Social Responsibility-The True Corporate Social Responsibility. In Competition Forum (Vol. 9, No. 1, p. 144). American Society for Competitiveness. Mohanty, R.P., 2008. Quality management practices, New Delhi: Excel Books. Polonsky, M. and Jevons, C., 2009. Global branding and strategic CSR: an overview of three types of complexity. International Marketing Review, 26(3), pp.327-347. Porter, Michael E. Competitive advantage of nations: creating and sustaining superior performance. Simon and Schuster, 2011. Robertson, R., 2011. Globalization: social theory and global culture, London: Sage. Scherer, A.G. and Palazzo, G., 2011. The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of management studies, 48(4), pp.899-931. Seidel, H.R. Marc-David, G.L., 2014. Being Early Beats Being Better. Harvard Business Review. Available at: https://hbr.org/2014/06/being-early-beats-being-better [Accessed February 23, 2017]. Sen, S. Korschun, B., 2006. The Role of Corporate Social Responsibility in Strengthening Multiple Stakeholder Relationships: A Field Experiment. Journal of the Academy of Marketing Science, 34(2), pp.158-166. The Economist, 2016. Uberworld. The Economist. Available at: http://www.economist.com/news/leaders/21706258-worlds-most-valuable-startup-leading-race-transform-future [Accessed February 21, 2017]. Valor, C., 2007. A global strategic plan for corporate philanthropy. Corporate Communications: An International Journal, 12(3), pp.280-297. Verma, L., 2015. Impact of Corporate Social Responsibilities in Modern Business Environment. International Journal of Scientific and Research Publications, p.580.

Analysis of Momentum in Indian Stock Markets

Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There Analysis of Momentum in Indian Stock Markets Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There