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Finance

Aug
03

What a Trump Tweet Means for the Stock Market

Jeffery Born

Jeffery Born

In the following post, D’Amore-McKim School of Business Professor Jeffery Born answers questions about his recent research that examines the impact that tweets from President Donald Trump have on a Semi-Strong Form (SSF) Efficient Market.

Q: Which tweets by Trump did you investigate?

A: We focused on tweets by President Donald Trump, which mentioned publicly traded firms (n=10) from the date of his election on November 8, 2016, to his inauguration on January 20, 2017. Fifteen tweets were separated by enough time for the stock market’s response to the information to be considered independent.

Q: Why did you look at these events?

A: In real time, there were many in the press who reported that the President-elect’s tweets were driving the firm’s stock price in a significant fashion. None of the press reports contrasted these movements against the same day movement in broad market averages, nor did the press report how risky the firms were (compared to the broad market). Failing to control for movements in the broad market and risk limits the conclusions one can draw the firm responses.

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Jan
12

Gold, silver or copper: What Will Shine Under Trump Presidency?

Jeffrey A. Born

Jeffrey A. Born

In the following post, D’Amore-McKim School of Business Professor Jeffery Born shares his thoughts on the future of mining exchange-traded funds under the Trump presidency.

Recent bullish stock market activity signals that concerns of a near-term recession are low. Given the use of gold in a number of manufactured goods, it is likely that Trump’s influence will bring balance to gold prices.

Copper prices have already jumped in anticipation of stronger demand during the Trump administration. The infrastructure spending that Trump is calling for is going to spill over into demand for industrial metals, and several have already incorporated this into their prices since the election. Thus, I don’t seem much upside in copper.

The ‘sleeper’ since the election has been silver. Silver isn’t the metal of choice when fears start to rise—gold is. Silver is much more of an industrial metal, and I think it is best poised to benefit from the expansion the market expects during the early Trump administration.

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Nov
03

FinTech: Changing the Way We Do Business

Steven Kursh

Steven Kursh

In the following post, D’Amore-McKim School of Business Associate Academic Specialist Steven Kursh discusses how technology will influence the future of the financial and insurance services industries.

We stand today on the precipice of significant changes in the ways that financial and insurance services are provided to businesses and consumers. Many of us are already familiar with Apple Pay or Samsung Pay mobile payments solutions. Some of us may have heard about BitCoin, a peer-to-peer technology for managing transactions between parties; Blockchain, a decentralized database that enables transparency with the potential to reduce fraud; or, perhaps, RoboAdvisors, which automates investment management. And you may well have already made some personal investments through crowdsourcing sites like Kickstarter.

These are all examples of what is broadly called FinTech, an evolution in the financial services and insurance industries that will impact nearly all of us, even consumers and enterprises in emerging economies. [1]    Read more…

Aug
25

Bitcoin: potential investment or waning fad?

Born-J-WebBio

Jeffery Born

In the following post D’Amore-McKim School of Business Professor Jeffery Born shares thoughts on the state of Bitcoin and what you should know before making an investment.

  1. Bitcoin is still here. While there was a lot of buzz about the more than 20 percent increase in price a couple of months ago, as of Aug. 22, the price is now down to $580. In June, bitcoins had spiked up to almost $723. In May, they were trading at $445, so there was a big spike up (nearly 40 percent), followed by a big drop (just over 20 percent). Quite a roller coaster.
  1. Bitcoins do not ‘grow’ (like trees or corn) nor do they pay interest, so the only way that an investor can profit from a Bitcoin investment is through price appreciation. While bitcoins have risen strongly since May, their price is only about half of the high value it reached in November of 2013. During the same period the S&P 500 has risen by about 24 percent, not including the dividends these firms have paid.Bitcoins should be considered a high-risk investment, meaning the investor is prepared to lose virtually everything invested. High-risk investments should be no more than 5 percent of one’s portfolio and I would recommend that one’s portfolio should be worth at least $250,000 before making a serious investment in high-risk assets.

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