‘Humans aren’t broken. They’re never broken,’ says Hugh Herr, the man on the frontier of prosthetic invention, including his own legs.

July 12, 2013, 6:31 p.m. ET

The Weekend Interview With Hugh Herr: The Liberating Age of Bionics

‘Humans aren’t broken. They’re never broken,’ says Hugh Herr, the man on the frontier of prosthetic invention, including his own legs.



‘It’s extraordinary that we live in this day and age with all our wonderful modern technology, and still we have shoes that give us blisters,” says Hugh Herr, with more than a little incredulity and perhaps even fresh anger at this lack of progress. “Shoes are one of the oldest devices that exist across the human timeline and it is juststaggering that we haven’t figured out that problem.” It’s a remarkable observation, on reflection, in more ways than one. Footwear and its discontents are more or less inevitabilities most of us take for granted. Also, Dr. Herr lacks biological legs below the knee. He is fitted with bionic prosthetics of his own invention, known as BiOMs, with his trousers rolled to display what he calls their “machine beauty.” Dr. Herr (pictured nearby) is the director of the Biomechatronics Research Group at the Massachusetts Institute of Technology Media Lab and a world leader at the frontiers of limb replacement and rehabilitation. Read more of this post

The hidden costs of investing

July 12, 2013 5:43 pm

The hidden costs of investing

By Lucy Warwick-Ching

Hidden Costs

Picture the scene. You’ve splashed out on the latest Aston Martin. But as you climb into the driver’s seat you’re asked to pay a fee for the key to the car and another charge for its manual. Then, just as you’re about to drive off the dealer’s forecourt you’re hit with yet more charges – an exit fee for leaving the garage, followed by separate charges for the leather seats and passenger door. Most of us wouldn’t keep silent if this scenario happened in real life, so why do so few investors complain about the percentage of their money that goes on charges? “Confusion about charges on investment funds and pensions has left most investors in the dark about how much they are paying,” says Gina Miller of SCM Private, a wealth manager, who is spearheading a“True & Fair Campaign” to encourage better disclosure of investing costs. Read more of this post

Restoring NCR’s Ka-ching! Under William Nuti, 129-year-old NCR has become the leading seller of ATMs and other digital point-of-sale devices. From the Bronx to the boardroom


Restoring NCR’s Ka-ching!


Under William Nuti, 129-year-old NCR has become the leading seller of ATMs and other digital point-of-sale devices. From the Bronx to the boardroom.

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Even by the rough-and-tumble standards of the Bronx, William Nuti was a clever and resourceful kid. As a nine-year-old newspaper boy in New York City’s northernmost borough, Nuti would work his way up an apartment building until he got to the roof. Then he would leap to the roof of the adjacent building, and work his way down again. Nuti’s Batman-like days might be over, but the same problem-solving instincts have served him well in the corporate world. As chief executive since 2005 of NCR (ticker: NCR), he has helped reinvent the company once known as National Cash Register, or “The Cash,” for the digital-commerce age.  Read more of this post

Rooting for Mother Teresa

July 12, 2013

Rooting for Mother Teresa


POPE FRANCIS last week approved two of his predecessors for sainthood — John Paul II and John XXIII — fast-tracking the latter in spite of his having only one miracle to his credit rather than the usual two. Mother Teresa, who died in 1997, has not been given the same exemption (she also has just one miracle) and remains merely beatified.

Having volunteered for a time with Mother Teresa, I find myself rooting for her cause as if for the home team. And on principle I’m disappointed by the message sent when two men with complex legacies outpace a woman who devoted herself completely to serving others. Read more of this post

Momentum investing is bad for your wealth; Managers should focus on companies, not prices

July 12, 2013 5:46 pm

Momentum investing is bad for your wealth

By Paul Woolley

Managers should focus on companies, not prices, says Paul Woolley

The role of the finance sector is to channel savings into productive investment. Those of us who invest directly in shares can form their own views on how best to do that. Everyone else is reliant on the industry to do it for them. Institutions such as pension funds fulfil this role, acting as the collection point for savers’ capital and setting the terms for how it is allocated. We innocently assume that our capital is directed to those sectors and companies with the best earnings potential. That way we receive the highest returns and the economy flourishes. The sad truth is that isn’t how it works in reality. The bulk of investment is now conducted without reference to economic value. There are only two basic strategies for managing equity portfolios in particular: fundamental investing – based on expected future cash flows – and momentum investing, or trend following, which considers only short-run price changes and disregards value. Fundamental investing calls for patience. Investors must wait either for prices to reflect the full value of the underlying business, or earnings to crystallise as dividends. Momentum investing delivers quick gratification – or not, depending on how long trends last. Read more of this post

The Courts CEO who’s a little bit of a maverick

The Courts CEO who’s a little bit of a maverick

At 17, he dropped out of school to work. At 20, he got married and became a father four years later. And by 32, he was Managing Director of electronics and furniture retailer Courts Singapore.




At 17, he dropped out of school to work. At 20, he got married and became a father four years later. And by 32, he was Managing Director of electronics and furniture retailer Courts Singapore. Mr Terry O’Connor, the Chief Executive of Courts Asia today, has not achieved the milestones in his life in the most conventional timeline or order. So it is rather appropriate that the latest feather in his cap, a pacey and engaging book that chronicles his adventures and that of the company, is titled: Why Not? The Story of a Retail Maverick and Courts. Launched this month, the first print run of 2,500 has already sold out. Read more of this post

Make Moments Of Clarity Turning Points For Your Life

7/12/2013 @ 3:57PM |3,723 views

Make Moments Of Clarity Turning Points For Your Life

By Marc Miller, Next AvenueContributor

We’ve all had it happen. Some major shift happens in life, maybe someone dies or becomes ill, you lose a job or you get a divorce. Alternatively, the event could be something positive like the first day of your dream job. Either way, it completely alters your perspective on life for a moment. The future you saw for yourself changes and suddenly you can’t believe that the niggling issues that have been plaguing you – the ding on your car, your annoying co-worker – bothered you so much.

What Moments of Clarity Teach Us

I call these times Moments of Clarity. For a brief period, you see what’s really important in life. You may even resolve to change your habits or thinking to reflect your newfound perspective. Trouble is, many people let these moments fade. When that happens, your former concerns reassert themselves and once again you get preoccupied by the ding on your car. But if you instead embrace your light-bulb moments and commit yourself to learn from them, even years after the actual perspective shift takes place, the result can be life changing. You may find yourself at the cusp of an entirely new career. Read more of this post

Of course it’s important to read the great poets and novelists. But not in a university classroom, where literature has been turned into a bland, soulless competition for grades and status

July 12, 2013, 7:44 p.m. ET

Who Ruined the Humanities?

Of course it’s important to read the great poets and novelists. But not in a university classroom, where literature has been turned into a bland, soulless competition for grades and status.


Fewer and fewer undergraduates are majoring in the humanities, and critic Lee Siegel couldn’t be happier. As he tells WSJ’s Gary Rosen, great poetry and novels are meant to be experienced in private and alone, away from the competitive pressures of the classroom. You’ve probably heard the baleful reports. The number of college students majoring in the humanities is plummeting, according to a big study released last month by the American Academy of Arts & Sciences. The news has provoked a flood of high-minded essays deploring the development as a symptom and portent of American decline. But there is another way to look at this supposed revelation (the number of humanities majors has actually been falling since the 1970s). Read more of this post

Bill of rights or branding exercise? As the Magna Carta approaches its 800th anniversary, it has become a symbol of issues that stray far from its original remit

July 12, 2013 6:06 pm

Thoroughly modern Magna Carta

By Peter Aspden

Bill of rights or branding exercise? As the Magna Carta approaches its 800th anniversary, it has become a symbol of issues that stray far from its original remit

It was, as these things go, something of a flop. The Magna Carta was a document hammered out between King John and a group of feisty barons in the summer of 1215 that set out an agreement between them on the subjects of England’s taxation, feudal rights and justice. It was the culmination of a sticky period for both parties, and must have been greeted with some eyebrow-raising on that evening’s edition of Newsnight. The most striking part of the charter allowed, for the first time, for the powers of the king to be limited by a written document. Observers hoped that it heralded a new era of collaboration between the monarch and his subjects. But the dawn was false. The Magna Carta was valid for just 10 weeks. Read more of this post

The New Wave of IPOs: Initial public offerings are back in vogue. Here’s why investors should be wary

July 12, 2013, 5:57 p.m. ET

The New Wave of IPOs: Initial public offerings are back in vogue. Here’s why investors should be wary.



There are lots of IPOs to pick from. But that doesn’t mean you should. The U.S. initial-public-offering market is on track this year to produce the most deals since 2007. In the second quarter, 80 companies publicly began the process of registering for an IPO in the U.S., more than double the number that did so in the same period a year ago, according to accounting firm PricewaterhouseCoopers. The publicly available IPO pipeline includes 140 companies seeking to raise a total of $30.5 billion, the firm said. That is on the top of the 95 companies that already have debuted this year, which have raised $23 billion, according to market-data firm Dealogic. Some of the best-performing IPOs this year have been those of familiar companies, such as SeaWorld EntertainmentSEAS -1.54% whose shares are up 42% since its April debut; restaurant chain Noodles & Co.,NDLS -1.72% which has jumped 139% from its June IPO; and Norwegian Cruise Line HoldingsNCLH +0.32% up 66% from its January deal. By comparison, the Standard & Poor’s 500-stock index is up 18% so far this year. There have been duds, too. GogoGOGO +6.88% which provides Internet services on airplanes, and online ad network Tremor Video TRMR -0.38% are down 18% and 20%, respectively, since their June debuts. Read more of this post

Covidien’s Wide-Moat Device Business Positioned Well for Long-Term Growth

Covidien’s Wide-Moat Device Business Positioned Well for Long-Term Growth

By Alex Morozov, CFA | 07-12-13 | 06:00 AM | Email Article

With the spin-off of the no-moat pharmaceutical segment,  Covidien‘s (COV)business is largely composed of products that garner strong competitive positioning in the marketplace. The company’s device business has wide-moat attributes because of its strong intellectual property and significant switching costs, which imply high barriers to entry. Given Covidien’s focus on products that deliver value to patients, providers, and payers, it is well positioned to prosper as more provisions of the U.S. Affordable Care Act take effect, while many of its peers will face significant regulatory and reimbursement pressures. The company’s growth prospects are healthy, buoyed by a particularly productive pipeline. As a result, we continue to believe the firm deserves a valuation premium compared with some of its medical technology peers. Read more of this post

Michael Birch, the founder of Bebo, bought the website back for a mere £1m. How will he make it fashionable again?

Bebo ‘has to be different to get people hooked’, says founder Michael Birch

Last week, the founder of Bebo bought the website back for a mere £1m. How will he make it fashionable again? All the old code will be thrown away, he tells Edwin Smith .


Michael Birch believes London’s tech sector problem is that the brightest UK graduates are too easily tempted by the high starting salaries on offer in the financial sector Photo: Alamy

By Edwin Smith

9:15PM BST 13 Jul 2013

There’s a scene in the Judd Apatow-produced cult comedy Superbadwhere two high school students are accosted by a suspicious character who tries to befriend them. The audience starts to think there might be something weird about this guy because of the way he talks and the fact that he’s trying to make friends with teenagers despite being in his 30s. Then come’s the clincher: “So,” he asks. “[Are] you guys on Myspace?”. In 2005, two years after Myspace was founded, News Corp paid $580m for it. By 2007, the year in which Superbad was shown at cinemas, it was already a byword for being uncool and out of touch. Fast-forward to 2011 and the social network’s value had plummeted. It was offloaded for a mere $35m to Specific Media Group and Danny Trejo, the Hollywood actor. The lesson was clear: things move fast in social media and what is hot and what is not can swing around with alarming speed. Read more of this post

Deutsche Bank Opaque Loans From Brazil to Italy Hide Risk

Deutsche Bank Opaque Loans From Brazil to Italy Hide Risk

By Elisa Martinuzzi and Vernon Silver  Jul 10, 2013

Deutsche Bank AG (DBK), perennially among the top three in global credit markets, made billions of dollars of loans to banks worldwide since 2008 and accounted for them in a way that obscured their continuing risk to investors.

Germany’s largest bank managed to lend to firms from Brazil to Italy while making the transactions disappear from its balance sheet, even though it still is owed the money, according to four people with knowledge of the practice and internal documents provided to Bloomberg News. Read more of this post

Estonia’s technology cluster

Estonia’s technology cluster

Jul 11th 2013, 15:00 by L.S. | TALLINN

IT TAKES just five minutes to register a firm in Estonia, says Mihkel Tikk, the head of the country’s online portal, a one-stop-shop for e-government services. Entrepreneurs wishing to start a firm log in with their national electronic identity-card and a few clicks later the confirmation arrives by e-mail. That service and many other equally convenient electronic offerings are a big reason why Tallinn, Estonia’s capital, is now mentioned in the same breath as Berlin, London and even Silicon Valley. According to one estimate, Estonia holds the world record in start-ups per person—a sizeable feat considering that the country has only 1.3m people.

International venture capitalists have taken notice (one, Dave McClure, created a hashtag on Twitter to describe the phenomenon: #EstonianMafia). And they are also investing. In May Transferwise, which offers a cheap way to send money across borders, announced that it raked in $6m in funding, with Peter Thiel, the co-founder of PayPal, being the lead investor. In April Fits.me, a virtual fitting room, raised £5m ($7.6m). Nearly a tenth of the firms in the portfolio of Seedcamp, a noted group of European angel investors, hails from Estonia, including Erply, a fast-growing maker of web-based retail software, which raised $2.15m in May. Read more of this post

5 Mobile Payments Data Points That Will Blow Your Mind

5 Mobile Payments Data Points That Will Blow Your Mind

JOSH LUGER JUL. 12, 2013, 2:20 PM 1,271

Consumers gravitate to convenience. That’s as true with payment technologies as it is with anything else. A prime example is the decades-old trend away from cash or checks and toward credit cards. Now, the mass adoption of smartphones and tablets has set the stage for a new move — away from fixed-point, card-based transactions and toward those completed on mobile. The old dream of the “digital wallet” is coming true in a very particular mobile-led fashion. In a recent report from BI Intelligence we explain the main types of mobile payments, analyze the state of the mobile payments race, examine the matchup between card readers and near-field communications (NFC), look at how traditional banks, credit card companies, and card processors are responding to the mobile payments threat, and detail who is furthest along in developing the all-in-one solution for merchants and consumers. Here are 5 data points that help underscore the explosion: Read more of this post

Asian Chat Giants Covet ‘Exciting’ Indonesian Mobile Market

Asian Chat Giants Covet ‘Exciting’ Mobile Market

By Hayat Indriyatno,Stephanie Hendarta& Diska Putri Pamungkas on 1:05 pm July 13, 2013.
The strong adoption of mobile social media, including chat apps,by Indonesian youths has seen major players from South Korea, Japan and China scrambling for a slice of the year ever-expanding market. Natasya Sandjojo is the quintessential Indonesian university student, constantly keeping in touch with her friends by firing off phone messages or calling them up. And like many tech-savvy Indonesian youths, she has found a way to do that virtually for free. “I prefer using a mobile chatting application over texting because it doesn’t charge me every time I send a message,” she says. “I originally decided to download KakaoTalk because a lot of my friends were using it. I can use the app to call my friends, free of charge. There’s this feature in it that lets me call using different sound effects, such as a cat’s voice. It makes calling friends a lot more fun.”

KakaoTalk is one of several mobile messaging applications that have taken Indonesia by storm over the past couple of years. Their popularity is underpinned by the fact that they allow users to send messages and make voice or even video calls over a mobile data connection or Wi-Fi network — known in industry parlance as “over the top” services because they bypass the traditional cellular phone and text messaging platforms. Read more of this post

China’s banking regulator has taken further steps to tighten its oversight of wealth management products by asking banks to register these products before selling them to the public

July 12, 2013, 7:42 a.m. ET

China Orders Banks to Register Wealth Management Products

China’s banking regulator tightens supervision over fast-growing segment

BEIJING—China’s banking regulator has taken further steps to tighten its oversight of wealth management products by asking banks to register these products before selling them to the public, according to a document seen by The Wall Street Journal on Friday.

The new rule would give the regulator increased information on these high-yield products, though it could slow the speed at which they come to market, a local banker who received the document said. Read more of this post

‘Diaosi’ become mainstream consumer force in China; “Diaosi” is originally a derogatory term referring to unattractive, poor, hopeless young people who stay at home playing online games

‘Diaosi’ become mainstream consumer force in China

Staff Reporter


“Diaosi,” originally a derogatory term referring to unattractive, poor, hopeless young people who stay at home playing online games, has gained widespread use as a mainstream social group. The term is especially favored by programmers and those in the media, aged between 30-39.

Shi Yuzhu, owner of a major e-commerce firm, likes to call himself a diaosi, as he found that those people are major patrons of his website. Read more of this post

China’s Fund Management Firms Seek to Emulate Alibaba’s Yu E Bao’s Success

07.12.2013 14:48

Fund Management Firms Seek to Emulate Yu E Bao’s Success

Manulife Teda starts recruiting service personnel as other firms mull an e-investment presence on Taobao

By staff reporter Cao Wenjiao

(Beijing) – Fund management companies are hurrying to establish their presence on Alibaba’s Internet platforms, after online shoppers showed great interest in Yu E Bao, a money market fund the e-commerce giant recently launched.

Beijing-based Manulife Teda Fund Management Co. has started recruiting client service personnel for its planned virtual store on Taobao, Alibaba’s e-commerce website. Read more of this post

Setting the Tone at the Top: Defining Moments in Leadership From the Hebrew Bible

Setting the Tone at the Top: Defining Moments in Leadership From the Hebrew Bible

Dov Fischer CUNY Brooklyn College

June 25, 2013
Journal of Accounting, Ethics and Public Policy, Vol. 14, No. 3, 2013

This study provides leadership examples from the Bible to help modern organizations implement internal controls that comply with the COSO Internal Control – Integrated Framework. The Framework’s first principle is a commitment by the organization to integrity and ethical conduct, namely by setting an example through a positive, “tone at the top”. This paper provides examples of, “defining moments in leadership”, from the Hebrew Bible to help contemporary leaders make ethical choices when faced with such defining moments. Defining moments; which are confronted by leaders, as well as ordinary people; can shape the legacy of a person, leader, organization, or even a nation. Some leaders make the right decision and go on to become role models, heroes, and even legends; others make a bad choice and their names become synonymous with failure. This paper examines the actions and choices of several heroes from the Hebrew Bible to see how they reacted when confronted with a critical choice during such defining moments; lessons to be learned include prudence, responsibility, and justice.

When Sell-Side Analysts Meet High-Volatility Stocks: An Alternative Explanation for the Low-Volatility Puzzle

When Sell-Side Analysts Meet High-Volatility Stocks: An Alternative Explanation for the Low-Volatility Puzzle

Jason C. Hsu Research Affiliates, LLC; University of California, Los Angeles – Anderson School of Business

Hideaki Kudoh Nomura Asset Management Co., Ltd. (NAM)

Toru Yamada Nomura Holdings, Inc. (NHI) – Nomura Asset Management Co., Ltd. (NAM)

June 14, 2013
Journal Of Investment Management (JOIM), Second Quarter 2013

Using a global equity dataset that includes emerging markets, we confirm that high-volatility stocks tend to deliver low average returns; this effect is robust to adjustments for for country and style factors. We also show that sell-side analysts earnings growth forecasts for high-volatility stocks are more biased. It is well-known that sell-side analysts are predictably optimistic; however, the relationship between the degree of optimism and a stocks volatility has not been documented before. We hypothesize that analysts inflate earnings forecasts more aggressively for volatile stocks, in part because the inflation would be more difficult for investors to detect. Because investors are known to overreact to analyst forecasts (under-adjust to analyst bias), this contributes to systematic overvaluation and low returns for high-volatility stocks. Additionally, we find sell-side analysts research informative despite the biases; stocks that have high forward E/P ratios based on analyst earnings forecasts tend to outperform and produce significantly positive FamaFrench alphas. This evidence rejects the cynical view of some in our industry that sell-side analysts are unskilled. More interestingly, we find high forward E/P stocks also exhibit high analyst bias, which supports an interpretation that analysts are more willing to inflate earnings forecasts for stocks that they believe are likely to deliver high returns or for which their inflated forecasts are likely to do no harm.

Unethical Culture, Suspect CEOS, and Corporate Misbehavior

Unethical Culture, Suspect CEOS, and Corporate Misbehavior

Lee Biggerstaff University of Tennessee, Knoxville – Department of Finance

David C. Cicero University of Alabama – Culverhouse College of Commerce & Business Administration

Andy Puckett University of Tennessee, Knoxville

June 2013

We show that firms with CEOs who personally benefited from options backdating were more likely to engage in other forms of corporate misbehavior, suggestive of an unethical corporate culture. These firms were more likely to overstate firm profitability and to engage in less profitable acquisition strategies. The increased level of corporate misbehavior is concentrated in firms with suspect CEOs who were outside hires, consistent with adverse selection in the market for chief executives. Difference-in-differences tests confirm that the propensity to engage in these activities is significantly increased following the arrival of an outside-hire ‘suspect’ CEO, suggesting that causation flows from the top executives to the firm. Finally, while these suspect CEOs appear to have avoided market discipline when the market was optimistic, they were more likely to lose their jobs, and their firms were more likely to experience dramatic declines in value during the ensuing market correction.

Fraud, Market Reaction, and Role of Institutional Investors in Chinese Listed Firms

Fraud, Market Reaction, and Role of Institutional Investors in Chinese Listed Firms

Reena Aggarwal Georgetown University – Robert Emmett McDonough School of Business

May Hu Curtin University of Technology

Jingjing Yang Jiangxi Normal University

July 3, 2013

We examine the extent of fraud and the type of financial fraud committed by listed firms in China, stock market reaction to the detection and announcement of fraud, the characteristics of firms committing fraud, and the association between institutional ownership and financial fraud. One of our objectives is to study the monitoring role of different types of institutional investors, such as mutual funds, pension funds and insurance companies. Using fraud data from the Chinese Securities Regulatory Commission between 2001 and 2011, we find wide occurrence of fraud, and a strong negative market reaction on the announcement date, particularly in cases of serious fraud. Fraud is more likely to take place at firms that have a smaller proportion of independent directors, and at poorly performing firms. We find firms with higher mutual fund ownership subsequently have fewer incidences of fraud. We do not find any association between ownership by grey financial institutions, such as insurance companies and pension funds that are likely to have business ties with firms, and future corporate fraud. Our results show that ownership by independent institutions, such as mutual funds, enhances corporate governance in Chinese capital markets, and serves as an effective monitoring mechanism.

Grandstanding and Spinning in VC Backed IPOs on AIM UK

Grandstanding and Spinning in VC Backed IPOs on AIM UK

Alberto Dell’Acqua SDA Bocconi

Antonio Guardasole Bocconi University

Stefano Bonini Bocconi University – Department of Finance; NYU Stern

May 14, 2013

We study a hand-collected dataset that includes 507 IPOs on the UK Alternative Investment Market (AIM) from FY2004 to FY2010. IPOs backed by venture capitalists registered an average underpricing of 25.8 percent; almost double that of non-venture-backed IPOs (14.6%). We provide new empirical evidence that grandstanding and spinning increase IPO underpricing. Conversely venture capitalists provide a certification role when they avoid moral hazard behaviors. Firms may strategically exploit these phenomena to accelerate growth while market regulators have to evaluate this evidence in light of stricter or more prone to laissez faire policies.

Are CEOs and CFOs Rewarded for Disclosure Quality?

Are CEOs and CFOs Rewarded for Disclosure Quality?

Kai Wai Hui Hong Kong University of Science & Technology – Department of Accounting

Steven R. Matsunaga University of Oregon

June 1, 2013

In this study, we provide insight into the economic determinants and consequences of disclosure quality by examining the extent to which boards consider disclosure quality to be an important responsibility of the CEO and CFO. Specifically, we examine whether CEO and CFO pay is related to the firm’s disclosure quality, as measured using the index from Anderson, Duru and Reeb (2009) and management forecast accuracy. We find changes in cash compensation for both the CEO and CFO to be positively associated with changes in each measure of disclosure quality. We also investigate factors that influence the extent to which boards reward the managers for disclosure quality. We find that the relation is stronger for high growth firms and firms that have stronger governance structures. Overall, our findings provide empirical evidence that boards’ view disclosure quality to be an important determinant of firm value and provide managers financial incentives to provide high quality disclosures.

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