Showing papers on "Stock exchange published in 1968"
TL;DR: In this article, the authors defined the definition and measurement of transaction cost on the New York stock exchange, and the determination of the ask-bid spread and transaction rate on the stock exchange.
Abstract: Introduction, 33. — The definition and measurement of transaction cost on the New York stock exchange, 35. — The determination of the ask-bid spread, 40. — The determination of the transaction rate, 45. — Statistical results, 46. — Summary and comments, 50. — Appendix I, 52. — Appendix II, 53.
2,025 citations
TL;DR: In this article, the authors discuss the scope of the problem, the contemporary debate, the public creditors, public creditors in England public creditors abroad, the market in securities, the turnover of securities the rate of interest in theory and practice the origins of the stock exchange.
Abstract: Part 1 The scope of the problem: the financial revolution the contemporary debate. Part 2 Government long-term borrowing: the earliest phase of the national debt 1688-1714 problems of administration and reform 1693-1719 the South Sea Bubble (I) the South Sea Bubble (II) financial relief and reconstruction 1720-30 (I) financial relief and reconstruction 1720-1730 (II) the national debt under Walpole war and peace 1739-55. Part 3 The public creditors: public creditors in England public creditors abroad. Part 4 Government short-term borrowing: borrowing by exchequer tallies borrowing by exchequer bills departmental credit the bonds of the monied companies the ownership of short-dates securities. Part 5 The market in securities: the turnover of securities the rate of interest in theory and practice the origins of the stock exchange. Appendices.
516 citations
TL;DR: In this paper, the authors show that proper and prompt analysis of data on insider trading can be profitable, although almost all earlier academic work has reached the contrary conclusion, and they conclude that there is no evidence of profitable exploitation of insiders' special knowledge and no value to outsiders in data on trading by insiders.
Abstract: CI NSIDERS" are officers, directors, and owners of ten per cent or more of the common stock of the companies listed on the New York and American Stock Exchanges. The Securities and Exchange Commission (the SEC) requires that insiders keep the Commission informed regarding transactions in the common stock and convertible securities of the respective companies. The interest of the SEC in trading by insiders stems in part from the belief that insiders should not exploit their special opportunities to know about developments in their companies for personal profit through short-term trading. Further, the Commission feels that information on trading by insiders should be fully disclosed to the investing public because of light which such trading might cast upon the company's future prospects. There is also wide-spread interest in the investment community in trading by insiders because of the prevalent belief that insiders have valuable private information which bears upon their company's prospects and that knowledge of the trading by insiders will permit valid inferences regarding future movements in the prices of stocks. Because of the interest by the SEC and the investment community in insider trading, we have undertaken this study. The subject has been studied before in many ways, but none of the preceding studies has been definitive and the additional methods of analysis seemed promising. Opinions are somewhat polarized. Academic studies have found virtually no evidence of profitable exploitation by insiders of their special knowledge and no value to outsiders in data on trading by insiders. Others believe that insiders often make extraordinary profits and that knowledge of their trading is valuable. Both the SEC and investors should be interested in which opinion is correct. The methods and coverage of this study differ from those of earlier work, as do our conclusions. We show that proper and prompt analysis of data on insider trading can be profitable, although almost all earlier academic work has reached the contrary conclusion. The first
312 citations
21 citations
Book•
01 Jan 1968
19 citations
TL;DR: Short interest and stock market prices were studied in this paper for the first time in 1968, with a focus on short interest and short interest in the stock market, and their relationship to stock market price.
Abstract: (1968). Short Interest and Stock Market Prices. Financial Analysts Journal: Vol. 24, No. 6, pp. 151-154.
16 citations
TL;DR: The random walk theory of stock price behavior has been applied to the stock market as mentioned in this paper, which implies that past stock-price movements cannot be used to predict future market prices in such a way as to "profit" from the predictions.
Abstract: In recent years, there has been considerable interest in the random walk theory of stock price behavior. This theory, as applied to the stock market, implies that past stock-price movements cannot be used to predict future market prices in such a way as to “profit” from the predictions. By not “profiting,” we mean that a trader using the past history of stock prices cannot apply mechanical decision rules that result in a consistently better performance than a simple buy and hold strategy. If stock price movements were to become systematic so that a “profit” were possible, proponents of the random walk theory argue that a sufficient number of market participants would quickly recognize the recurring pattern and exploit it. In exploiting it, they would drive out the opportunity for “profit,” causing the price series to approximate a random walk.
9 citations
TL;DR: The European capital market is comprised of several individual national markets, each having its own individual characteristics as mentioned in this paper, each market consists of equity and debt issue markets and facilitating financial institutions, and six problem areas exist in the overall European system which require delineation and analysis before any successful attempt at harmonization can be achieved.
Abstract: THE EUROPEAN CAPITAL MARKET has gained considerable importance during the last few years. Among the most significant factors which explain this phenomenon are: 1 ) the advent and growth of multinational corporations and the need to finance these giants; 2) the formation of the European Economic Community and its objective of capital market policy harmonization; and 3) the persistent balance of payments deficits of the United States which have led to a restrictive foreign capital investment policy for American companies. The European capital market is comprised of several individual national markets, each having its own individual characteristics. Each market consists of equity and debt issue markets and facilitating financial institutions. However, six problem areas exist in the overall European system which require delineation and analysis before any successful attempt at harmonization can be achieved. These relate specifically to the individual national stock markets and are:
8 citations
TL;DR: In this article, the authors present some supplementary evidence pertaining to relative price changes for longer differencing intervals and advance some reasons for supposing that some of the factors behind the remarkable profits which could have been obtained using Levy's system in the last few years may be non-recurring.
Abstract: S INCE the development of high speed electronic computers there has been a revival of interest in the theory of speculation' and a great many empirical efforts to test the random character of stock marke-t prices.2 Most of these tests have been applied either to individual securities or to a representative stock price index.3 The conclusion has generally been that the structure of short run changes in security prices is nearly, if not quite random. According to Fama, "The model may be acceptable even though it does not fit the facts exactly. Thus, although successive price changes may not be strictly independent, the actual amount of dependence may be so small as to be unimportant."'t A more serious challenge to the random walk hypothesis has recently been voiced by Levy in an unpublished Ph.D. dissertation.5 Levy's study differs from other studies in at least two respects. Its focal point is a much longer differencing interval of 26 weeks in contrast to the daily, weekly, or monthly intervals that have typically been used by others in the post-war period to test for randomness. When the same methodology was applied to a four-week interval, Levy's results were not superior to a policy of buy and hold.6 The longer test interval consumes valuable degrees of freedom and raises the distinct possibility that Levy's findings for the five-year period from October 24, 1960 to October 15, 1965 may have been largely the result of unique circumstances that cannot be generalized to other periods. In the latter part of this paper we will present some supplementary evidence pertaining to relative price changes for longer differencing intervals and advance some reasons for supposing that some of the factors behind the remarkable profits which could have been obtained using Levy's system in the last few years may be non-recurring. The second feature which distinguishes Levy's study is an emphasis on rank order price changes rather than the absolute percentage change in price from one period to another. Those stocks in a list of 200 widely held common stocks listed on the New York Stock Exchange which appreciated enough in one 26-week period to rank in the top decile had an average increase in price 1. Footnotes appear at end of article.
4 citations
TL;DR: A recapitulation of stock values and stock prices can be found in this paper, with the title "A Recapitulation: Stock Values and Stock Prices", with a focus on the stock market.
Abstract: (1968). A Recapitulation: Stock Values and Stock Prices. Financial Analysts Journal: Vol. 24, No. 6, pp. 134-148.
TL;DR: In this article, a five-year comparison of the actual earnings performance of firms employing convertible preferred stock in corporate mergers with earnings simulated as if common stock had been employed to finance the mergers is presented.
Abstract: THE EXCHANGE OF SECURITIES in a merger is nontaxable to stockholders of the selling corporation only if the security received is common stock or convertible preferred stock with voting rights. Since 1960, preferred stock of this type has become increasingly popular in financing corporate mergers. The purpose of this study is to identify the reasons for this choice and to determine the financial impact, if any, on the subsequent earnings performance of firms financing mergers with convertible preferred stock. The basic hypothesis is that financing acquisitions with convertible preferred stock, instead of common stock, increases net earnings available to the residual owners of the acquiring firms. This hypothesis is tested by means of a five-year comparison of the actual earnings performance of firms employing convertible preferred stock in corporate mergers with earnings simulated as if common stock had been employed to finance the mergers. Data relate to thirty-three mergers financed with newly authorized issues of convertible preferred stock between January 1, 1960 and December 31, 1962. This study group includes all mergers where data were available when the acquiring firm was listed on the New York Stock Exchange. A control group of thirty-three similar mergers accomplished through an exchange of common stock is also employed. Four alternative common-stock valuation factors are considered: pre-merger earnings, cash dividends, market prices, and book values of the two constituent firms participating in each merger. Statistical tests confirm the findings of earlier studies that market prices and earnings were the primary determinants of actual exchange ratios. Accordingly, only these two factors are employed in simulating what the merger terms would have been if common-stock financing had been employed. A five-year comparison of the actual and simulated behavior of the study group yields the following results: simulated earnings per share are, on the average, slightly less than actual earnings, but the differences observed do not meet conventional standards of statistical significance. The earnings available to the residual owners of acquiring firms are higher (when compared with the returns that presumably would have resulted from a common-stock merger) for the majority of firms employing convertible preferred stock, but only slightly. The use of convertible preferred stock, instead of common stock, also increases incremental cash dividends associated with the mergers paid out by the acquiring firms. In addition, incomplete conversion of convertible preferred into common stock enables acquiring firms to "save" common stock when compared with direct common-stock financing of the study mergers. This trade-off between an increase in cash dividends and a "savings" in common shares outstanding, prevented the use of convertible preferred stock from substantially increasing net earnings available to the residual owners of acquiring firms during the five-year study period. Statistical analysis of the study group and control group indicates that firms merged with convertible preferred stock are considerably larger than their counterparts in
Journal Article•
TL;DR: The Central Certificate Service of the New York Stock Exchange as mentioned in this paper allows interbroker transfers to be effected by book entries without transfer of the underlying stock, which is a central clearing corporation that centralizes payments and deliveries between brokers.
Abstract: (1) Stock exchange service corporations which provide computerized bookkeeping for member firms. (2) Stock exchange and other clearing corporations which centralize payments and deliveries between brokers. ( 3 ) Central Certificate Service of the New York Stock Exchange, whereby stock held in the names of brokers for customers will be transferred into large denomination certificates, in nominee name, and left with a depositary. This will permit inter-broker transfers to be effected by book entries without transfer of the underlying stock.
TL;DR: In this paper, the authors explore the nature of these cycles and draw implications about future trading from them, and show that these surges have recurred frequently enough to create a cycle in the NYSE turnover rate (the number of shares traded annually as a per cent of the shares listed).
Abstract: THE SHARP INCREASE in stock market trading during 1967 and 1968 astonished Wall Street observers and forced unprecedented closings of the New York Stock Exchange to enable brokers to catch up with the attendant paperwork. Yet, the last half century has provided numerous instances of sharp increases in trading similar to that of 1967 and 1968. In fact, these surges have recurred frequently enough to create a cycle in the NYSE turnover rate (the number of shares traded annually as a per cent of the shares listed). This paper explores the nature of these cycles and draws implications about future trading from them.
TL;DR: The first publication of dual-purpose investment companies appeared in the United States in the spring of 1967 by Curley and Mcindoe as mentioned in this paper, and they have attracted a lot of attention since then.
Abstract: I: INTRODUCTION M. Louise Curley Robert A. Mcindoe DUAL PURPOSE INVESTMENT COMPANIES first appeared in the United States in the spring of 1967. Today, there are nine of these unique funds with assets of about $400 million. Seven were started for cash; two began with an exchange of securities; six are listed on the New York Stock Exchange with its concomitant advantages. Several articles on dual-purpose investment companies have been published.' They have helped to make investors more aware of the new types of security created in dual-purpose funds and have encouraged analysts to study them, especially the capital shares which for most of these funds are selling at substantial discounts from their net asset values. These are unique securities and experience with them is still limited. As a result investors are still groping toward a satisfactory procedure for appraising their investment value. Table 1 shows the nine funds, the date each commenced operations, their initial assets, their lives and the market values and net asset values of their shares.