George W. Kester

A sociological explanation of financial market growth

Abstract How is it that people are so willing to pay financial investors large sums of money when it is not at all clear that these investors are especially capable of outperforming the market? This is not the first case of an apparently exploitative relationship flourishing between two consenting parties. The sociologist Pierre Bourdieu has developed theories addressing such questions based upon his own practical investigations into similar seen, but unseen, social practices in the field of education. We must understand that people are cultural creatures who, throughout an entire lifetime, have been exposed to a complicated web of cultural understandings that pattern their relationship to the investment game. Given the extent of all of the cultural baggage regarding the investment game that people “bring to the table,” perhaps the fact that people consume the services of investment professionals is, as opposed to being inexplicably irrational, quite reasonable after all.

What Happened to the Super Bowl Stock Market Predictor

This article re-examines the well-known and publicized Super Bowl Stock Market Predictor, which forecasts the directional change of the U.S. stock market on the basis of the old AFL and NFL affiliation of the Super Bowl winner. Although it continues to outperform a buy-and-hold strategy when used to shift in and out of common stocks, investment performance and prediction accuracy has declined in recent years, including an incorrect prediction in 2008. But, 2009 was its comeback year. The outcome of Super Bowl XLIII predicted an up market, and the S&P 500 was up by 23.45%.

Likely gains from market timing in Japan

This paper explores the potential gains and required predictive ability of market timing in Japan and then compares the results to previously reported findings from another developed financial market — the United States — and a developing Asia Pacific financial market — Singapore. Shifts between cash equivalents and common stocks are evaluated. The results demonstrate that the potential gains from market timing in Japan are quite attractive and that the minimum predictive accuracy required for successful market timing may be attainable by some portfolio managers. However, for the period examined, the results also indicate that larger incremental gains result from market timing Singapore stocks and cash equivalents.

An Alternative Perspective on MutualFund Performance

This article examines the returns and risk-adjusted performance of the 99 mutual funds that have been in continuous operation for the 45-year period 1967–2011. The returns and risk-adjusted performance of the mutual funds are compared to the results of a passive buy-and-hold strategy (S&P 500) and simulated portfolios market timed in accordance with the Super Bowl Stock Market Predictor. Over the 45-year history of the Super Bowl through 2011, the simulated market-timed portfolios outperformed 95 of the 99 mutual funds based upon return and terminal portfolio value, and all 99 mutual funds on a risk-adjusted basis.

A commentary on financial research in the Asia Pacific region

Abstract The hypotheses, models, theories, and methods of analysis that constitute the science of finance have generally been derived from Western models of markets and institutions. A significant amount of research in the Asia Pacific region consists of studies attempting to determine whether they are as true or applicable there as they are believed to be elsewhere. The purpose of this paper is to stimulate thinking and debate regarding the focus of Asia Pacific financial research and the universality of Western financial models.

Symposium on "The savings and loan industry: crisis or opportunity?"

This paper presents the summary of a symposium on the crisis facing the savings and loan industry in the United States. It includes the thoughtful and thought-provoking opinions of four very active and renowned industry partic ipants and observers. The symposium examines the causes of the crisis and identifies key issues facing policy makers. The symposium was sponsored by the Management Department, Bucknell University. We thank Professors George Kester and Elton McGoun for editing the presentations of the panelists and providing an insightful introduction and concluding note. We believe this symposium format is a valuable tool for discussing different perspectives on crises that are currently in progress. From time to time we will publish symposium discussions about ongoing crises. We hope that these sym posium papers will act as catalysts for debate and research on emerging crises.