Stick A Fork In Me!

I'm done, done, DONE with grading for the semester. Now there's nothing left to do but wait for the complaints. Ah well - that I can deal with.

For a reward, I spent the night spent reading an anthology of short stories titled Strange Brew by P.N. Elrod (author of the Vampire Files). It includes stories by some of my favorites, including Jim Butcher, Patricia Briggs, and Charlaine Harris, among others (what can I say - I'm a big fantasy/sci-fi nerd).

On the biking side, there's been nothing but rain for the last few days, so I went to the gym to use the exercise bike for about 40 minutes. It's a poor substitute for having wheels on the road, but my 50 miler (the Angel Ride) is only 11 days ahead, so it's better than nothing.

Enough goofing off - back to research.

Update: The rain stopped, so I got in another 26 miler. I rode like a circus bear on a bike, but I was still within a minute of my best time, so I'll take it. The good news is that I seem to be able to handle at least that distance at a pretty good pace even on an off day. So, with a bit more work, I should be able to do the 50 if I dial back a bit. It won't be pretty, but it's a ride, not a race.

The Default Major

A colleague just pointed out a great article in the New York Times, titled "The Default Major". Here's a few choice pieces:

Business majors spend less time preparing for class than do students in any other broad field, according to the most recent National Survey of Student Engagement: nearly half of seniors majoring in business say they spend fewer than 11 hours a week studying outside class. In their new book “Academically Adrift: Limited Learning on College Campuses,” the sociologists Richard Arum and Josipa Roksa report that business majors had the weakest gains during the first two years of college on a national test of writing and reasoning skills. And when business students take the GMAT, the entry examination for M.B.A. programs, they score lower than students in every other major.

...

Donald R. Bacon, a business professor at the University of Denver, studied group projects at his institution and found a perverse dynamic: the groups that functioned most smoothly were often the ones where the least learning occurred. That’s because students divided up the tasks in ways they felt comfortable with. The math whiz would do the statistical work, the English minor drafted the analysis. And then there’s the most common complaint about groups: some shoulder all the work, the rest do nothing.

“I understand that teamwork is important, but in my opinion they need to do more to deal with the problem of slackers,” says Justin Triplett, a 2010 Radford graduate who is completing his first year in Radford’s M.B.A. program. From his perch as a teaching assistant, he estimates that a third of students in the business school don’t engage with their schoolwork. At Radford, seniors in business invest on average 3.64 hours a week preparing for class, according to the National Survey of Student Engagement.

...

One senior accounting major at Radford, who asked not to be named so as not to damage his job prospects, says he goes to class only to take tests or give presentations. “A lot of classes I’ve been exposed to, you just go to class and they do the PowerPoint from the book,” he says. “It just seems kind of pointless to go when (a) you’re probably not going to be paying much attention anyway and (b) it would probably be worth more of your time just to sit with your book and read it.”

How much time does he spend reading textbooks?

“Well, this week I don’t have any tests, so probably zero,” he says. “Next week I’ll have a test, so maybe 10 hours then.”

He adds: “It seems like now, every take-home test you get, you can just go and Google. If the question is from a test bank, you can just type the text in, and somebody out there will have it and you can just use that.”

Let's see - the students don't study as much, they minimize effort, cheat on take-home exams, and don't come to class prepared.

These sound like things I've heard my own colleagues say in the hallways at Unknown University.

Nothing new. But somehow, there are professors in my school (several come to mind without much effort) who hold the students to high standards AND get top evaluations. The common threads in their classes is that they DEMAND that students come to class prepared and cold-call from day one. And they make classroom performance (either measured by the quality of participation or by numerous in-class quizzes (often of the unannounced, "pop quiz" variety) a major part of the grade.

Of course, they work a lot harder than the other professors in the classroom, but DUH.

Students will slack, not go to class, and cheat like crazy if all the instructor does is read off PowerPoint slides and give softball take-home assignments. They're rational, after all.

I view the course design (of which the grading scheme is a major part) as a mechanism design problem. In other words, it's an exercise in putting together a grading scheme that forces the students into behaviors that I want them to engage.

For the most part, they're rational - they'll find a way to get the grade they want while minimizing effort. The trick is to set the class up so that they can't slack. Unfortunately. that's harder than the old "30% of the class grade is based on the mid-term, 50% on the final, and 20% on quizzes" structure.

But it's possible.

The First Ride of the Season

Up until the last two weeks or so, I've been getting up at least 5 days a week at 4:30 and working out at the local YMCA from 5-6 (mostly spinning on the stationary bike). As a result of this and watching my diet, I've dropped about 15 pounds since the beginning of the year. So, I'm about the same weight at the beginning of biking season that I usually am around mid-Jul. I was wondering how this would translate to actually being on the road.

Today I found out - I took my first ride of the season, and went about 17 1/2 miles (about twice what I usually do at the beginning of the season). Despite the relative cold (about 52 and windy as all get out), it was pretty easy - I was able to keep my heart rate under 150 pretty much the whole way (except for the last 50 yards of a steep half-mile long hill at the 8 mile mark). So, it looks like it'll be a good riding season.

I'll be riding in the Angel Ride, a 50 mile fund-raiser for the Hole In The Wall Camp over Memorial Day Weekend, so I need to get with it. It's actually the second day of a two-day ride where they go the length of northern Connecticut (from the northwest corner to the northeast corner - about 80 miles) the first day, stay at the camp over Saturday night, and ride down the eastern border of Connecticut (northeast to southeast - about 50 miles) the second day. I'll be as part of a group that includes two guys from my weekly bible study and a lady from my wife's grief group (she lost a daughter to cancer a couple of years ago).

And finally, there's only three weeks left to the semester - yeah, baby!

Some Reasources For Teachers

I'm not (by any account) always the best teacher. I do all right - ry (and sometimes even succeed), but I have a few personal characteristics that sometimes work against me. First, I have a certain, shall we say, lack of interpersonal skills and an occasional inability to pick up on cues (insert joke about faculty member with mild Asberger's here). In addition, I have a tendency to become a bit sarcastic under stress, and that never plays well in the classroom.

But, much like the palace eunuch, even if I can't replicate it while it's happening all around me, I know it when I see it.

I saw it today when I came across Joe Ben Hoyle's website. He's an accounting professor at the University of Richmond, and I've mentioned him previously here, where he was profiled in UR's alumni magazine.

It turns out he has a website with some good teaching material. One of the links is to a set of short (1-2 pages each) essays on teaching and another is to his blog. Both are well worth reading. Go over the blog when you have time, but do yourself a favor, and download the essays (they're in one document) now. I almost guarantee you'll get something out of it.

We Really Need Extra Credit (oh wait, we don't)

Every semester, I get a handful of students who come up to me and say something like "UP, is there anything I can do for extra credit? I reeeeeaaaaalllly need to pass this class". So this time, I thought I'd let students self-select up front instead of whining ex post.

I have about a 6-7 extra credit assignments for my investments class. I parcel them out one by one, with a deadline for each. Most will involve some kind of Excel assignment that will drive home a class topic, and will take an hour or so. If they complete an assignment by the deadline, they get one or more points added to the next exam.

I mostly have juniors in my investments class. They should currently be in the midst of applying for internships. Since they can't apply without a resume, I thought that giving them a point on the exam for simply having a resume review done by our college career services person was pretty much a no-brainer.

The end result - only three out of 21 students had the resume review done and got the points. And of course, they were my top three students.

Ah well. At least this makes it pretty easy to answer the students who darken my door in the last week of the semester looking for extra credit.

As usual, The Far Side has something that's on point.

Using Screen Recording Software

After I posted my video on security market indexes, I received a number of emails and messages asking questions on how I make them. So, I thought it would make for a a good post. So think of this a a FAQ on making videos for use in the classroom (or elsewhere).

1) What software do you use?
I use Camtasia, which is made by techsmith. It costs $299, but is available to academics for $180. Many universities make it available to faculty for free off a server, so check with yours to see. You can download a fully-functional 30-day free version to get started. You also need a headset with a microphone - using the computer's built in one doesn't work very well. There are other packages that do the same thing, but most people I know that are doing this are using Camtasia.

2) How does it work? Is it complicated?
Camtasia is what is called "Screen recording software". Basically, it records whatever goes across your computer screen as it happens. So, if you're working through a PowerPoint slide deck or a spreadsheet, it records whatever goes on your screen and puts it into a video file. If you're narrating material as you go through the slide deck, it will record the narration to. Alternately, you could record the video and add a voice-over later.

You can then edit the video to put in call-outs, captions, etc... Once that's done, Camtasia will create videos in just about any format you want - flash, MOV, AVI, iPad, etc...

You can also combine snippets of different videos. For example, I will often record 5-10 minutes at a time, clean it up, and save it. I will then combine the individual snippets. This is helpful when I make an error and want to later correct it.

3) How long does it take to make one?
The most time consuming part of making a video is getting organized before you start - making sure your slides are clean, getting your comments organized, etc... (but then, that's true of any teaching). Once everything is clean and organized, I find that there's about a 2:1 to 3:1 ratio of video production time to video length. In other words, a video with a 30 minute run time might take me about an hour to 90 minutes to create. For shorter videos, the ratio is less - I find that I can usually talk for 5-19 minutes without making a gaffe, so I can usually do my shorter videos in one pass. For longer ones, I often make mistakes partway through and have to re-record some parts. Once feature that adds extra time in the production of longer videos is that I typically put in a table of contents, and doing that takes a little bit of time.

4) How do you use the videos in class?
There are a couple of ways I've used them.

• As a substitute for a lecture - When I'm away at a conference or class gets canceled due to weather, I'll put a lecture online. I've also used them this way when I get time-constrained (i.e. there's a topic near the end of the semester, and you're running out of time). So this way, I can effectively get more lecture time.
• As additional resources for the students on selected topics - there are some topics that seem to be harder for some students to grasp at first pass (e.g. in the intro class, non-constant dividend growth valuation almost always confuses some students). So, for these topics, I put up a short primer (about 15-30 minutes with a number of examples and lots of explanation). That way, when a student has trouble, the first thing I point them to is the video. For most students, this is sufficient. If it isn't, I can usually fill in the gaps pretty quickly.
• For assignments that require technical skills: This semester, I'm assigning a lot of extra-credit assignments in my investments class that involve some Excel work. Rather than spend a lot of time in class showing them (for example) how to estimate a regression, I'll put up a video that walks them through it in Excel. As an aside, once I've got a video on a topic, I can often use it in other settings. For example, I did one on data tables a year or so back. Once I had it done, I found a lot of ways students could use this in other classes (for two examples: They could see how a stock's intrinsic value changes when growth or cost of capital varies. or they could see how duration varies with coupon and maturity of a bond).
  

5) How much do the students actually use them?
I haven't done any formal studies as to how much they're used, but when I post a new video, my total hits on the video is usually 2-3 times the number of students in my class. My guess is that this means that they might view it in its entirety once and then go back a time or two to see specific subsections.

6) I'm sold. How do I get started?
First, go to Techsmith's website and download the free 30-day trial. Then watch a few of their instructional videos (they've done a great job with these, by the way). Then, get yourself a headset (mine cost about $50 from Staples. Finally, if you want more help, Dan Parks has written an excellent (and inexpensive) book titled Camtasia Studi 6: The Definitive Guide. It's for the older version (the current version is version 7), but the basics are all there.

Finally, when you make a good video, let me know (I can always use more resources).

Getting Ready To Start Classes

I'm still in the midst of hurriedly putting a paper together for the FMA deadline (Friday). So, it's pretty much been reading articles, writing, reading, writing, rewriting, rewriting, etc...

But during my breaks, I try to put a bit of time in on my next semester's classes. I'm teaching Investments again after a couple of years' break, so I'm redoing my syllabus (it['s a new edition of the text, too).

When this happens, my thoughts invariable turn to teaching (not just WHAT to teach, but HOW and WHY). Here's some good advice on the HOW: don't use Dilbert's approach to answering students' questions:


That is, unless you're tenured and don't care about evaluations. Of course, if you're tenured, you might often feel the need to use to respond to many of your colleagues. At least, that seems how it works in a few cases I've seen.

Ah well - I'm done with my workout and time to get to work (and it's not even 6:30 yet). Somehow, I've become a morning person over the last few months - The Unknown Wife works out at the Y from 6-7 with a friend (the friend has time constraints. So, if I'm going to get mine in , I have to be at the Y by 5 when it opens. This means getting up at 4:30 - I know at least one of my readers (Gerry) would approve.

I need Some Advice From My Readers - Excel Topics For Class

I'm teaching the investments class this spring, and it's been a couple of years. I'm trying to add a few things to the class, and have pestered my colleagues at Unknown University (and other schools) for some advice. So, I thought I'd use y'all likewise to see what suggestions you might have.

Here's my goal: I want to embed more Excel assignments in my class, since Finance Majors can't have too much Excel exposure. So, I'm trying to add some assignments that expose them to the following concepts (note- those in bold type have been suggested by readers)

• Data Tables
• Pivot Tables & Pivot Charts
  
• IF (and Nested IF) statements
• Macros and basic VBA
  
• Solver and Goal Seek
• Regression Analysis
• Conditional Formatting
  
• Using some of the auditing tools
• Keyboard shortcuts
• VLOOKUP/INDEX/MATCH
  

My goal is to get them comfortable with at least some concepts that can be used to signal to potential employers that they're at least a cut above the typical student. This way, they can have samples of the output they've produced and (if they're smart) copies of the underlying spreadsheets on their flash drive and laptops in their back pockets for interviews. It's no magic bullet, but I figure it can;t hurt.

Some of the projects they might be doing could include (note: I might not get to all of this, but it's good to have aspirations):

• Building pro-forma statement-driven cash flow valuation models
• Profiling industry ratios (taken from Compustat) using Pivot Tables
• Calculating "justified" price multiples using regressions of multiples on industry fundamentals
  
• Estimating betas
• Calculating a variance-covariance matrix
  
• Calculating portfolio weights that yield efficient frontiers using solver (and possibly, some basic VBA)
• Calculating tracking error
• Performance attribution
• Technical analysis/indicators (i.e. moving averages, etc...)
• Describing statistical properties (skewness, kurtosis, etc...) of return distributions
• An event study
  

I've lifted some ideas from Benninga's Financial Modeling book, and also read Craig Holden's text.

So, here's what I'm looking for - can you suggest any additions to the list as far as Excel topics they should cover or projects I can assign? We cover only the equity side of things (no derivatives or fixed income, since they get those in other classes).

Please sound off in the comments.

Happy Thanksgiving

It looks like Unknown University is all but deserted the day before Thanksgiving. I finally decided to quit swimming against the tide, and canceled classes for today (I usually only get about 30% attendance on the day before Thanksgiving in the best of times, so it's no big loss).

Instead, I told the students that I'd put up a video with the lectures for the week on Risk and Return. Once it's done, I'll post a link here. I'm pretty happy with it - it runs the gamut of topics from the calculations for standard deviation, covariance, expected returns, etc... to Markowitz Portfolio Theory and the Capital Market Line to the CAPM and the Security Market Line.

Although I don't use all this material in my intro class, I expect to use it in my investments class this spring. So, this should allow me to go a bit faster and cover more material there.

Unfortunately, I have to wait another hour before the video software is done rendering the final version and I can go home. Then it's off the the Unknown In-Laws house tomorrow for turkey overload and football.

Here's wishing you all a Happy and safe Thanksgiving

Making The Grade

I was cleaning out some to the 1500+ emails I've let accumulate in my gmail account (unlimited space leads to sloppy housekeeping), and I came across this old (but still excellent) piece titled "Making the Grade", by Georgia Tech physics professor Kurt Weisenfeld:

IT WAS A ROOKIE ERROR. AFTER 10 YEARS I SHOULD HAVE known better, but I went to my office the day after final grades were posted. There was a tentative knock on the door.
""Professor Wiesenfeld? I took your Physics 2121 class? I flunked it? I wonder if there's anything I can do to improve my grade?'' I thought: ""Why are you asking me? Isn't it too late to worry about it? Do you dislike making declarative statements?''

...Time was, when you received a grade, that was it. You might groan and moan, but you accepted it as the outcome of your efforts or lack thereof (and, yes, sometimes a tough grader). In the last few years, however, some students have developed a disgruntled-consumer approach. If they don't like their grade, they go to the ""return'' counter to trade it in for something better.

What alarms me is their indifference toward grades as an indication of personal effort and performance. Many, when pressed about why they think they deserve a better grade, admit they don't deserve one but would like one anyway. Having been raised on gold stars for effort and smiley faces for self-esteem, they've learned that they can get by without hard work and real talent if they can talk the professor into giving them a break.

Read the whole thing here - it'll be part of my next semester's syllabus.

The Fun of The Exam Continues

It seems like every semester, I get at least one student who bombs an exam (or two) and reacts in a way-over-the-top manner. Last semester, it was a senior finance major (with a pretty high GPA) who suffered from anxiety attacks. She drew a complete blank during my Advanced Corporate Finance midterm. She subsequently appeared in several professors' offices wondering tearfully if she should change her major in her senior year. We eventually talked her down off the ledge, and she even subsequently took my Student-Managed Investment Fund class, where she did just fine.

But this semester took the grand prize. The 80/20 rule says that 20% of your students cause 80% of your problems. That would be true this semester if you counted ONE student alone as my 80%. She (we'll call her Brittany henceforth) is to put it succinctly, a bit of a Princess - high maintenance, dressed entirely in designer clothes, vocal, bossy to her friends, and simply not doing well in the class. BP informed me two weeks into the class that she's taking 18 (or is it 20) credits this semester because she needs to graduate this spring. So she "really really really needs to pass this class." She constantly whines in class about the workload because she has soooo much on her plate, and complains about any thing that doesn't pass her standards (by which she means, anything that she doesn't understand easily). And nothing is ever her fault.

Her first exam grad was a 55. The most recent exam (the second of four) was a 58. The rest of the class seems to be getting it -- in fact, as I recently posted, the class average was one of the highest I've seen on this exam in about ten years of teaching. The class has really respodned to the challenge - they've not only stepped up their game, they seem to have realized that complaining to me about the workload is like trying to teach a pig how to sing (i.e. they expend effort, accomplish nothing, and both they and the pig (that's me) get annoyed). Except for Brittany the Princess - she's used to getting her way with whining and intimidation, so she keeps trying.

After she got her exam back, (it was handed back Monday - the drop deadline for the class), she came to my office wondering if she should stay or drop. She wanted assurances that if she was "close", I'd give her the minimum passing grade (since it's required, all she needs is a D-). Unfortunately, I couldn't give her any such assurances - I said that I often make the cutoff for the various grades somewhat lower than what's in the syllabus, but that's done on a case by case basis after looking at the overall class performance, and that whether or not she should stay in the class is a decision that only she could make. So far, there's nothing new to the story - pretty much standard stuff we've all seen many times.

Then the fun started.

BP goes out into the hall and starts sobbing and wailing. That's right, wailing. You could hear her almost on the other side of the building. Of course, I stay safely in my office - there's no way on God's Green Earth I'm going out to deal with that, because there are (like Bear Bryant said about passing the football) only a few things that can happen, and most of them are bad. Luckily, one of the female staff from one of our institutes came out and said "honey, why don't you go into that empty classroom so that you'll have some privacy" (read: "so that you won't be such a spectacle"). The staff worker said that she figured that the student in question was used to using the "cry out loud and maybe you'll get what you want" card. Shortly thereafter, several of her classmates (the ones who she hangs with) came in to my office and said "don't worry about Brittany, UP - she'll be fine. She does this to get attention and to see if she can get you to give her what she wants).

Unfortunately for my blood pressure, she decided not to drop the class.

Ah well - another day in academia. At least I'll have more Brittany stories to share as the semester progresses.

The Unknown Students Nail an Exam

I've been teaching the undergraduate core finance class this semester, . If you've been teaching for a while, you know that it's easy in that class to get discouraged by students who are (pick any or all that apply) unmotivated, unable to do simple math, whiny, unwilling to be stretched, never darken your office doorway, etc...

This semester, I made a conscious decision to really push my students - since the first week of September, they've two exams, three very involved problem sets (with a lot of curves thrown in - the typical one takes about 3-5 hours to complete), eight online quizzes, and short pop quizzes (they typically last 5 minutes or less and contain 1 or 2 basic questions on the material to be covered for the day's class) on average every other day, and almost constant cold-calling in class (in a 50 minute class, I typically call on 15-20 students). I like to think that I've set the bar at a far higher level than the other sections of the intro class being taught this semester. In fact, some of my students have told me that I've brought the class together - they're getting together in study groups of as many as 10 at a time (and there was supposedly a study group the night before the first exam of almost twenty students).

I've also made a decision to teach in full-blown crazy mode. Those who've heard my bloviations over the years know that I'm a flaming extrovert that tends toward (in my better moments) impressions of Ahnuld (I Am The Denominator!), Mister Rogers, Kermit The Frog, Inigo Montoya, and various characters from the Simpsons, South Park, and Monty Python, often in rapid succession. The last few years, the Unknown Son's illness had really taken a toll on my zest for teaching (and it showed in my evaluations). While he passed away almost 18 months ago, it's only been this semester that I've really felt like the "old" me. So, teaching has been a real pleasure.

Well, my class just had their second exam, and to put it bluntly, they did more damage to the exam than the Republicans did to the Democrats in the last election - they knocked it out of the park. There was the usual variation in grades, of course (one student got a 23 - It's never when your grade approximates your age), but on the whole they performed better than any comparable class I can remember going back to the late 1990's.

So, there is hope. It's nice to see that when you set the bar high (and meet the students more than halfway), they respond to the challenge.

Here We Go Again

All good things (and summers) come to an end - we're starting back up at Unknown University. For the first time in four years, I get to teach the undergraduate introductory course. For many faculty, this would be a bad thing (a lot of my colleagues simply don't like teaching the core course). However, I find it to be one of m favorite classes - it's easy, and I get to be an energetit and somewhat goofy evangelist for the Finance Department.

While putting together my syllabus, I went looking for an appropriate quote or two (I usually stick a few in there, if only for my own amusement). I came across a perfect one for the Unknown Daughter. As I've mentioned before, she's extremely bright (I know, I'm biased). But she also hangs out with a great bunch of kids - she and her closest three girlfriends are all smart, creative, and nice. They now can have a group motto.

The quote (attributed to Mark Twain) is:

Knowledge is Power
Power Corrupts
Study Hard
Be Evil

Even better, you can buy a t-shirt with the motto at Cafe Press.

Professor's Epic Email Response To a Tardy And Entitled Student

Like most faculty, students coming late to class bothers me - it disrupts the class, interrupts my train of thought, and in general causes a negative externality. In previous years, the problem seems to have gotten worse - in some classes, 15% would wander in after class has started. So this semester, I borrowed a page from a colleague's book. He teaches law for our B-School, and is a former partner for a major Wall Street Law firm. He's very formal in class, is known throughout the school as a fantastic professor, and a bit of a hardass (formal, but a hardass).

So now, whenever a student walks into class late, I merely stop talking in mid sentence. I then quietlty wait until the student is seated. At this point, they're usually embarrassed. I continue waiting they have their book AND pencil out. Of course, the spotlight on them makes them extremely uncomfortable. I don't ream them, don't make any faces, comments, or do anything else - merely ask "Are you ready now?" Then I take up right where I left off. It's kind of fun, and I don't have to come off like my usual sarcastic self. It seems to work pretty well - late arrivals have really dropped off this semester.

But this guy (Scott Galloway at NYU) just throws them out if they come in late. A student got the treatment recently and sent him a (to my ears) somewhat entitled email. Galloway give him an epic reaming.

Read the responses - they're classic (particularly the David Mamet references). If you have any favorite techniques for dealing with late students, feel free to share.

Of course, as they say in the ads, "your mileage may vary".

HT: Craig Newmark (who gets it)

Can't You Bump My Grade Up?

At the end of the semester, I often get a student or two who want to protest their grades. Not too many, because I make a lot of preemptive moves explaining how their grade is determined, and I try to be very explicit in my syllabus. In addition, I teach mostly upper-level courses with almost all finance majors, so most of my student can actually do the simple computation necessary to figure out their grades. Finally, I think they get the sense that trying to work me for a grade simply won't be worth the effort.

Still, it happens - often because "they need to get a "C" to graduate" (or some variation involving a scholarship, Dean's list, or so on).

Rate Your Students has a pretty good piece on this topic that nails it. You can read the whole thing here, but the money quote comes at the:

Up until now, I was always suckered into actually engaging in the debate. But this fall I'm going to try a new tactic, and anyone out there who wants to is free to adopt it, 'cause I think it's going to work, and save me a lot of frown lines and email editing. Rather than getting into the specifics of their grades, I'll write the following: "It looks like you're asking to be graded under different guidelines from those in the syllabus, which were used to calculate the grades of the other 170 people in your class. Is this correct?"

Priceless. I think I'll use it.

New Excel Video

Since students in all three of my classes will need to do a data table in Excel at some point, I decided to put together a short video on 1 and 2-variable data tables.

Teaching three preps has been much more time consuming than I'd expected. Luckily, I'm almost through the most time consuming parts of my classes - in one, the most technical material comes first, and the other two (the case course and the student-managed fund) require a lot of "setup" at the beginning of the class. So, I'm hoping that crunch time will shortly be over.

In any event, here are the videos

click here for the video file in MPEG-4 format, and here if you want it in MOV format.

It takes time to make these, but it should save me a fair bit of time in the long run. For example, I won't need to spend class time on teaching my students the basics of data tables any more. They'll still have questions after viewing the video, I'm sure, but they can review it multiple times, and it'll eliminate the need to go over the basics in class.

I know one person who's put the majority of his introductory finance lectures into video files like these (he did it initially for an online course). Now he uses them as review material for upper-level students who are weak in one area or another.

Any comments on the video are welcome. It's not perfect - there are some "ummm" and "uh" moments. And yes, I've stripped out the identifying data - I finally realize what some people had said in the comments.

What to Use as the Equity Risk Premium?

I'm teaching Corporate Finance again this semester. In the class, we spend a fair bit of time on the CAPM (yes, I know - it's not perfect. But it is a still pretty good). One of the big issues is what to use as the Market Risk Premium (or, as it's sometimes called, the "Equity Risk Premium). Looks like I'll be using this piece as background: The Equity Risk Premium in 100 Textbooks by Pablo Fernandez of the University of Navarra. Here's the abstract:

I review 100 finance and valuation textbooks published between 1979 and 2008 (Brealey, Myers, Copeland, Damodaran, Merton, Ross, Bruner, Bodie, Penman, Weston, Arzac...) and find that their recommendations regarding the equity premium range from 3% to 10%, and that several books use different equity premia in different pages.

Some confusion arises from not distinguishing among the four concepts that the word equity premium designates: Historical equity premium, Expected equity premium, Required equity premium and Implied equity premium.

Finance professors should clarify the different concepts of equity premium and convey a clearer message about their sensible magnitudes.

It's worthwhile reading - you can download the full version on SSRN here.

HT: Jim Mahar at FinanceProfessor.com

Tutorials For The BA2+ Calculator

In any class, there are some sections that take up a disproportionate amount of class time but are only needed by some of the class. For example, in my case course, some of the students have a very good grasp of how to use their business calculators, while others somehow made it out of the introductory class without learning something as basis as how to calculate simple present and future values using the built in financial functions of their calculator.

So, how do I make sure that all my students have the basic background knowledge needed to survive the class? My solution this semester is to use screen recording software to create a few tutorials for the Texas Instruments BA2+ calculator (the model we encourage our students to use in the intro class).

I made a short 5-6 minute video that goes over how to change the settings on the calculator (i.e. the number of decimals displayed, number of periods per year, etc), and another to demonstrate how to solve problems involving present and future values of lump sums (and how to solve for interest rate and number of periods, too). I'll make a third video to cover annuity problems, a fourth to cover NPV and IRR problems, and a fifth to work some problems in depth.

I've posted a link to one of the videos below. In case you're interested, I created the guides using Techsmith's Camtasia software, Texas Instrument's calculator software emulator, and hosted it on Techsmith's Screencast platform. It's not professionally done by any stretch of the imagination, but I think it gets the basics across (and there aren't enough "ummm's" and "Ah's" to be too distracting).

Updated 8/22: I put all the tutorials in one spot for easier access. Updated 8/20: They're in MP4 format, which should be playable on the latest versions of Windows Media Player and most other video players. If you want to download them, feel free, but realize that the largest is about 20 meg. So it might take a while (depending on your connection speed).

Introduction To The BA2+ Calculator

Solving Present and Future Value Lump Sum Problems On The BA2+ Calculator.

Solving Annuity Problems on the BA2+ Calculator

Using the Cash Flow Register on the BA2+ Calculator

Any feedback is appreciated.

Things You Wish You Could Write On Students' Papers

Here's a pretty good list of things I wish I could write on some students' papers, from Sapience Speaks. #6, while harsh even for this list, is my favorite. Feel free to add your own in the comments.

1. "You certainly have a way with words. A long, long way."
2. "You seem to be attempting a very delicate approach to the assignment--so delicate, in fact, that you fail to touch on it at all."
3. "Every one of the words in this sentence is utterly devoid of meaning."
4. "I can't help feeling that you treat the ideas in your paper much as a black hole treats its neighboring star systems: forcefully and vigorously synthesizing them, you condense them beyond recognition, leading to utter destruction and chaos."
5. "like the broad swift stream / a thesaurus will go far / but yields no great depth."
6. "This paper isn't even bulls*&t. Bulls*&t has substance. This is diarrhea."
7. "I find your rhetorical strategy in this expository to be similar to that of a rhinoceros in extracting a tooth: large, blunt, and wholly ineffective."
8. "This entire page says exactly NOTHING."
9. "Every teacher wishes she could read a paper like this one. It makes the rest of her life so much brighter by contrast."
10. "As I was reading, I felt that you were trying to include in your paper every type of fallacy possible. If so, you only missed one."
11. "The level of disorganization in your paper suggests that your true topic must be chaos theory, not, as your title implied, Wordsworth."
12. "the wind speaks all day / yet with only empty breath: / you have no thesis"
13. "I'm not sure even you believe this sentence."

On Teaching Math

The Unknown Daughter is also known by most of my family as "The Math Princess." She seems to get math concepts more quickly than almost anyone else at her grade level. Well, there is one one boy in her class who is just about at her level, but she has a better Rear Naked Choke than him (knowing what boys can be like, I started teaching her various martial arts techniques at age 4 - I figure if she cripples the first boyfriend, my work is largely done).

She's really good at the rote learning/memorization/multiplication tables part of math, and that's important (hey - if you know your tables cold, many things seems to get easier). But what makes me happiest is that she really enjoys the math puzzles I give her. When she finally sees a pattern, she gets really excited. For example, when she realized that she could use the distributive law (i.e a(b+c) = ab + ac) to do mental math, she got really excited.

So, I enjoyed this piece titled "A Mathematician's Lament" by Paul Lockhart. Here's the best line(s) IMO:

Part of the problem is that nobody has the faintest idea what it is that mathematicians do. The common perception seems to be that mathematicians are somehow connected with science— perhaps they help the scientists with their formulas, or feed big numbers into computers for some reason or other. There is no question that if the world had to be divided into the “poetic dreamers” and the “rational thinkers” most people would place mathematicians in the
latter category.

Nevertheless, the fact is that there is nothing as dreamy and poetic, nothing as radical, subversive, and psychedelic, as mathematics. It is every bit as mind blowing as cosmology or physics (mathematicians conceived of black holes long before astronomers actually found any), and allows more freedom of expression than poetry, art, or music (which depend heavily on properties of the physical universe). Mathematics is the purest of the arts, as well as the most misunderstood.

So let me try to explain what mathematics is, and what mathematicians do. I can hardly do better than to begin with G.H. Hardy’s excellent description:

"A mathematician, like a painter or poet, is a maker of patterns. If his patterns are more permanent than theirs, it is because they are made with ideas. "

So mathematicians sit around making patterns of ideas. What sort of patterns? What sort of ideas? Ideas about the rhinoceros? No, those we leave to the biologists. Ideas about language and culture? No, not usually. These things are all far too complicated for most mathematicians’ taste. If there is anything like a unifying aesthetic principle in mathematics, it is this: simple is beautiful. Mathematicians enjoy thinking about the simplest possible things, and the simplest possible things are imaginary.

He's an advocate of teaching by puzzles. like "if you inscribe a triangle in a rectangle, can you figure out how much of rectangle's area is captured by the triangle" (for an arbitrary triangle, that is). Read the whole thing - it's worth it.

HT: Kids Prefer Cheese