Musings on Markets

A news story from yesterday's Wall Street Journal on hedge funds and their herding behavior provides a good starting point for this disc...

One of the biggest stories of the last week was Goldman's $ 500 million investment in Facebook for approximately 1% of the company. Extr...

In corporate finance, we examine how a business decides what investments to take (the investment decision), how much to borrow to fund these...

At first sight, illiquidity is bad news for investors, since it gives rise to transactions costs, which, in turn, can lay waste to investmen...

In my last post, I looked at how the asset allocation decision can be altered by differences in liquidity across asset classes, with the uns...

In my last post, I argued that illiquidity is not a minor problem restricted to a few stocks . In fact, it can affect all stocks, at least d...

Much of financial theory is built on the premise that markets are liquid for the most part and that illiquidity, if it exists, occurs in poc...