Experience Stern | News & Events

Excerpt from Barron's -- "Xavier Gabaix, a finance professor at New York University, has derived a crash-frequency formula that he believes captures a universal trait of all markets, not just equity markets or those in the U.S. According to that formula, the odds of a 12.8% crash in any given six-month period are 0.92%, almost as low as the actual frequency in the U.S. stock market over the last century."

Excerpt from Marketplace -- "The Japanese central bank is so desperate to spur growth that they’ve gone over to negative interest rates, and Japan has suggested it would like to devalue its currency to promote growth — which doesn’t sit well with the U.S. The aspect of Abenomics that calls for structural reforms and economic liberalization has been very slow to materialize, which NYU Stern Business School professor Gian Luca Clementi said is key to growing the country’s economy. 'There are lots of small banks that give loans on very dubious criteria, and lots of companies that are definitely not the most productive, but they are entrenched politically. [They] receive continuous financing for projects of dubious productivity,' he said. 'On the other hand, smaller entrepreneurs, younger entrepreneurs have a harder time getting financing.'"

Excerpt from Fast Company -- "Failure to fix Airbnb's regulatory problems in New York and elsewhere would hurt the $25.5 billion-valued company’s prospects with future investors, public markets, and the public. 'The prospect of having to face regulatory risk questions every time they announce earnings, it’s just going to stymie the growth of the company,' says Arun Sundararajan, an NYU professor and the author of a recent book about the sharing economy."

Excerpt from Business 2 Community -- "There’s a phenomenon known as the illusion of explanatory depth, and the idea is that there are certain things that we assume we understand much better than we do. If you ask someone how well can they can explain how a bicycle works on a scale of one to ten, people will between an eight and a ten out of ten."

Excerpt from Fortune -- "This is a world that needs better leaders, with new skill sets. The playbook from the past won’t cut it today. My advice for you as you enter this world is to be flexible, be bold, and don’t fear criticism."

Excerpt from The Wall Street Journal -- "Academics have previously found a more significant two-day effect [of hedge fund investments on stocks], but that is for fast-moving day traders, not investors. Over a month, a study a few years ago by Stephen Brown of New York’s Stern School of Business and Christopher Schwarz of the University of California found no impact from 1999 to 2008."

Excerpt from The New York Times -- "Most of us have no difficulty recognizing luck when it’s on conspicuous display, as when someone wins the lottery. But randomness often plays out in subtle ways, and it’s easy to construct narratives that portray success as having been inevitable. Those stories are almost invariably misleading, however, a simple fact that has surprising implications for public policy."

Excerpt from The Wall Street Journal -- "[Kotkin's] answer to 'How should we live?' is: amid an 'urban pluralism' that 'encompasses the city center as well as close-in suburbs, new fringe developments, and exurbs.' I find this quite sensible and level-headed but worry that the middle ground—the place we used to come to and to sit and reason together and agree on the common good—seems to be more and more difficult to get to these days."

The Leonard N. Stern School of Business Graduate Convocation Ceremony took place on Friday, May 20, 2016 at the Theater at Madison Square Garden.

Excerpt from Wall Street Daily -- "Polman is dedicated to securing Unilever’s role as a positive influence on the planet as well as the market. He’s dedicated to green energy, fair taxation, and innovations that help all kinds of people. Further, he’s keenly aware of the habits and patterns of consumers all over the world. His efforts will attempt to maintain Unilever’s sales and success, as, by 2020, millennials will have the majority of the U.S. vote. This rising generation is becoming more vital to the economy, and 80% of millennials want to work towards solving the issue of climate change."

Excerpt from Lohud.com -- "Thomas, who took office in January, received an executive MBA in finance and leadership after attending the school for two years every other weekend. 'I think it's going to help me really speak to the economic problems of Mount Vernon and connect a network of disconnects,' Thomas said Tuesday. 'Mount Vernon has never had a clear relationship with its finances. It's always been a political football.'"

Excerpt from The Huffington Post -- "Governor Andrew Cuomo’s $22 billion transportation capital plan, particularly the 'Pave NY' program, will yield major dividends for the Empire State. Should New York provide cities with the option to assess an infrastructure charge, we can leverage more public dollars to do more for the public good. As mayor of one of the densest cities in New York and in the nation, I see immense potential in this idea. It will raise the resources necessary to underwrite major long term construction projects, creating sustainable jobs and economic growth for years to come. Building and maintaining this vast network requires a coalition of engineers, equipment companies, contractors, and educators to trains and ready the workforce to do the work. Additionally, it will raise awareness of the need to reduce carbon emissions, making our air better to breathe."

Excerpt from Fortune -- "Now it turns out that those women who have reached the top have probably been out-earning their male counterparts for years. That’s because companies making a genuine effort to increase diversity in senior management have apparently been holding on to 'high-potential' women — meaning those perceived as having the right skills and talent to move up — at least in part by paying them more than 'high-potential' men. On average, says a new study, high-potential women earn 10% more annually than their high-potential male colleagues."

Excerpt from The New York Times -- "In his heyday in the 1990s, Mr. Weill was 'a Sun King — one of the most powerful and successful financial individuals in New York,' said Roy Smith, a finance professor at New York University business school. Mr. Weill gained that status as a deal maker, with a series of ever-larger mergers culminating with Citicorp and the Travelers Group forming the behemoth Citigroup in 1998. The last deal helped knock down the Depression-era Glass-Steagall Act, which separated banking from the riskier securities business."

Excerpt from Barron's -- "...this year, the recovery rate in high yield bonds has been extremely low — just 13.9%, reports Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, in a Tuesday report published Wednesday on S&P Capital IQ LCD. This continues a trend that started last year. Drawing on academic research, primarily done by Edward Altman of New York University Stern School, Fridson reports that the junk bond default rate was 2.83% in 2015, lower than the long-term mean of 3.33%. Normally, the recovery rate is higher when defaults are low. But in 2015, the recovery rate was just 34%, far below its historical average of 46%."

Excerpt from CNBC -- "I think the pathway for Amazon to be worth 700 is there. But it's a very narrow one. I've always called Amazon a 'field of dreams' company, which is if you build it, they will come--the building being the revenues and the profits. And I think what they've had going for them, they've always had that consistent story, which is we're going to go for revenues first and we'll get profits later. So it's built on that trust, and I don't think they can deliver the margins you would need to get to this 700. So that's the basis for my valuation."

Excerpt from Fortune -- "...Thomas Philippon, professor of finance at NYU’s Stern School of Business, argued at the symposium that taxing leverage makes sense, but is easier said than done. He argues that banks could hide their leverage using complex financial instruments like contingent assets or derivatives, avoiding Clinton’s tax while still bulking up on risk."

Excerpt from the Harvard Business Review -- "I propose a risk-oriented framework for deciding when and how to allocate decision problems between humans and machine-based decision makers. I’ve developed this framework based on the experiences that my collaborators and I have had implementing prediction systems over the last 25 years in domains like finance, healthcare, education, and sports. The framework differentiates problems along two independent dimensions: predictability and cost per error."

A new report issued jointly by the NYU Pollack Center for Law & Business and Cornerstone Research finds that U.S. Securities and Exchange Commission enforcements against public companies and their subsidiaries increased more than 50 percent in fiscal year 2015 and are on a pace to equal or exceed that high-water mark in FY 2016. 

Excerpt from the Business Standard -- "He quotes the economist Paul Romer of New York University about macroeconomics being plagued by 'mathiness' and thus failing to progress as a true science should, and that current debates among economists are often as pointless as those between 16th-century advocates of heliocentrism and geocentrism - whether the sun or the earth was at the centre of things."

Excerpt from TechCrunch -- "The difficulty with learning machines arises because they train themselves on what they see, the 'training data,' that cannot completely represent situations the machine will see in the future. These are sometimes called 'edge cases' or 'Rumsfeldian unknowns,' in that they are unknowable in advance. Humans typically deal with such edge cases remarkably well with no prior 'training' by applying common sense or finding analogies and learning from these samples of one."

Excerpt from Dagens Nyheter - "The world's cities are expected to grow by two and a half billion people by 2050. The US economist Paul M. Romer have a suggestion on how we can solve the challenges of overpopulation and migration: Create new sanctuaries where people are given the opportunity to test new ways of living."

Excerpt from Poets & Quants -- "In my professional career I am most proud of the entrepreneurial endeavors I’ve taken on before and during my time at Stern. I have a production company, Little Red Ro Productions, through which I’ve produced several short films. While at school, I co-created the Little Bright Notebook, a project design tool for creative types and entrepreneurs, along with my classmate Lenore Champagne Beirne. Stern does a great job of creating a diverse and interesting class of students each year. Our collaboration is a perfect example of two people with wildly different backgrounds and areas of expertise coming together to build something that helps the broader creative community. I’m not sure we would have crossed paths were it not for Stern."

Excerpt from NPR -- "'It was truly remarkable how much more effect Mrs. Obama had on the commercial fashion industry that almost any other celebrity you could find in any other commercial setting,' Yermack says. And it wasn't just a freak blip on the graph: 'This would be a very permanent thing,' Yermack emphasized. 'The stocks would not go down the next day. So to put a number on it for just a generic company at a routine event, it was worth about $38 million to have Mrs. Obama wear your clothes.'"

Excerpt from BusinessBecause -- "'Data is their business. It's the growth path for all of them,' said Vasant Dhar, NYU Stern professor of business and data science, and editor of the Big Data journal. 'The advice I give students these days is to take as many courses as possible that require working with real data,' he added."