Valuation, Investment and the Pure Profit Share

Valuation, Investment and the Pure Profit Share

This paper explores some implications for valuation and investment of challenging the standard assumption that there are no aggregate pure profits in the US economy. First, it highlights the theoretical importance of monopoly rents for fluctuations in average Q. A series for such rents is then computed by assuming that production is Cobb-Douglas, as fluctuations in the output share of pure prof...

CEO Share Ownership and Firm Valuation

We estimate the relation between Tobin’s Q and CEO share ownership with firm and CEO-firm fixed effects. Our results reveal an inverted U-shaped relation only when external pressure for good governance is weak, where the pressure is measured by product market competition and institutional ownership concentration. The inverted U-shaped relation seems to be a manifestation of some CEOs capturing ...

The Valuation of a Pure Risk Element

Towards Automated Share Investment System

Predictability of financial time series (FTS) is a well-known dilemma. A typical approach to this problem is to apply a regression model, built on the historical data and then further extend it into the future. If however the goal for FTS prediction would be to support or even make investment decisions, prediction generated by regression-based models are inappropriate as on top of being uncerta...

The global upward trend in the profit share, July 2007

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