Monthly Archives: July 2008

Opinions on SOX

From Euromoney Online:

Execs Lose Faith In Sarbox

Jul-22-2008 | Source: Compliance Reporter

Company executives are taking an increasingly dim view of some effects of Sarbanes-Oxley. According to new research by IT firm Oversight Systems, just 10% of officials think that complying with SOX has strengthened investors’ views of their company, down from 20% four years ago. Similarly, fewer (29% compared with 33%) respondents believe that compliance has reduced the risk of financial fraud. The firm interviewed roughly 100 CFOs, audit chiefs, controllers and internal auditors in May and June.

By contrast, SOX has won increasingly glowing reviews among executives for its impact on financial reporting. More than two-thirds (69%) of respondents said compliance has ensured accountability of those involved in financial reports and operations, up from 46% in 2004. Almost half (45%) said the law has improved the accuracy of their financial reports, a marked rise from 27% four years ago.

Cutting compliance costs was still the top SOX-related goal, despite 80% stating that their costs were the same or lower than in previous years. Dana Hermanson of the Coles College of Business at Kennesaw State University told CR that the shifts in attitude can be attributed at least in part to the increasing distance from the last major accounting scandals and to budget pressures in a tough economic climate. “It’s a classic problem… [Compliance] costs are easy to measure; the benefits are very hard to measure.”

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Templating: best practices?

A question from alt.php:

What I’m asking – is there a best practise to this concept?

Not really… When you say “best practice”, there’s always a question, “best for what?” And that “what” in turn can be either a feature of system environment or a design objective…

For example, storing content in a database is good enough for most occasions, except when you are told not to expect database connectivity in the target system environment. 🙂

As to design objectives, you may be told to develop for performance, maintainability, or time to market. Let’s pretend you are told to store both textual content and executable code. Storing the content in the database is clearly the preferred solution, but what of the code? You can:

  1. Store it in a database and use eval() to run it, which will be fine and dandy in terms of time to market and maintainability, but will have its share of performance issues, which, however, will only show at high loads, or
  2. Store it in files and execute it with include(), which will have the best performance, but will create problems with both maintainability (because backing up the database is no longer enough; the file system must also be backed up) and time to market (because you now need two separate storage routines, one for content, another for code), or
  3. Figure out a hybrid solution: store code in a database, but also save each snippet into a file when the relevant DB record is updated and/or when the code is about to be used for the first time and then include() the resulting file; this approach would create a minor performance drawback (there will be the overhead of generating code files and checking for their existence), get rid of all maintainability issues (the database is, once again, the only source of data the application needs to operate), and push back your time to market (since you need to write the code to manage the stored code).

In case some of the above sounds familiar, #1 (with a ton security precautions surrounding it) is implemented in Drupal under the moniker “PHP filter” and #2 is used in WordPress’ plugin and theming systems (although you can’t create a new plugin or theme file from within WordPress, you definitely can edit those files with WordPress). I am not aware of anyone using #3 as described, but I sincerely doubt I am the first person to have thought of it… 🙂

Removing non-numerical characters from an Excel worksheet

A question from Askville:

I need an excel macro that will delete all the letters and special chctrs from a cell, while leaving the numbers in tact

Example:

1-216-564-7894 would become 12165647894
a214d546d7894 would become 2145467894

This sub will remove all characters except numbers from the currently selected cell(s):

Sub RemoveNonNumeric()
    For Each Cell In Selection
        MyText = Cell.Value
        MyNewText = ""
        MyLen = Len(MyText)
        For i = 1 To MyLen
            MyChr = Mid(MyText, i, 1)
            If MyChr Like "[1234567890]" Then
                MyNewText = MyNewText + MyChr
            End If
        Next i
        Cell.Value = MyNewText
    Next Cell
End Sub

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Hedge fund performance deteriorates

From Euromoney Online:

HFs Suffer Worst First Half Since ’90

Jul-14-2008

Hedge funds got off to their worst start in nearly two decades in 2008, the Independent reports. The exception was Man Group, the giant U.K. alternative asset manager, which posted solid results.

As the markets have weakened, hedge fund performance has suffered more than in the wake of the dot.com bust, as managers have had to write down billions or face closure. Peloton Partners, set up by Ron Beller and Geoff Grant, and Sailfish Capital have closed, while the private equity giant Carlyle ended its hedge fund business, and Citigroup in effect shut Old Lane, the manager it bought less than a year before.

Hedge Fund Research, a U.S. analysis group, said the industry index it compiles was the worst in the first six months of the year since it began tracking in 1990.

The group found that on average, hedge funds declined 0.75% this year, only the second time in 18 years the industry performance has fallen into negative territory. The first, in 2002, came in the fall out of the bursting of the technology bubble.

This compares with the first six months of 2007, when the industry advanced 7.45%. The highest recorded half year was in 1992, when global hedge funds were up 16.7%.

Dani Rodrik’s academic fantasy

Dani Rodrik writes:

I once had a fantasy. I would devote a whole year, perhaps a sabbatical, just to reading and thinking, and would not write anything. I mean really nothing: no papers, no articles, no op-eds, no contributions to collected volumes. I would turn down all invitations to contribute papers to conferences or books by saying “Thank you. but I am just reading and thinking this year, not writing.” The idea was to force a fundamental correction in the balance of trade between what went in my head and what came out.

I really don’t think it works that way, unless you have a total recall. You read a book by A, and you get really intrigued how it resonates with another book written by B twenty years ago on a completely different factual material (and with your own thinking on the subject). If nothing else, it begs a note to self…

Hedge funds to consolidate?

Two articles from Euromoney Online:

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Fewer, But Larger, U.S. HFs Up In 1H08

Jul-09-2008 (Source)

The number of hedge funds launched in the U.S. in the first half of the year may have dropped 50%, but the ones that are being created are amassing more money.

A survey by Absolute Return magazine showed that, while there were only 35 new launches in the Americas thus far in 2008, those funds took in $19.5 billion. In the first half of 2007, 72 funds were created and amassed $14 billion.

Five funds took in more than $1 billion so far this year, with Goldman Sachs Group Inc.’s (GS) GS Investment Partners, an equity long/short fund, taking in $ 8.1 billion. Goldman Sachs also received $1.1 billion from investors for its Mortgage Credit Opportunities fund. As such, the two funds took in 41% of investments in new Americas hedge funds.

The second-largest launch came from Conatus Capital Management, whose Conatus Capital Partners fund brought in $2.3 billion.

The hedge-fund industry is currently estimated at $2.65 trillion, with some 10,000 funds, but confidence is waning along with the economy, and some funds have faced difficulty recently. Investors are demanding ever-higher returns for the fees they pay to be in the funds, and as such new money flowing into hedge funds continues to decline.

Feeling the brunt of it are smaller hedge funds, including top performers. Only 1,152 new funds were launched globally in 2007, down almost 50% from a 2005 peak, according to Hedge Fund Research Inc. Because so many funds closed last year or merged into others, the business expanded by just 589 funds overall, the smallest increase in six years.

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Bigger May Be Better As Minor HFs Quit

Jul-09-2008 (Source)

Bigger may be better for hedge funds at a time the $2 trillion (1 trillion pound) industry’s smaller players face tough choices of either merging or being forced out of business, reports Reuters.

In the first six months of 2008, more than a dozen smaller funds have already agreed to let larger players own a piece of them, and investors and managers expect that pace to quicken.

Man Group, the world’s largest publicly traded hedge fund group, has taken stakes in Ore Hill Capital and Nephila Capital, while Goldman Sachs’ Petershill unit has taken stakes in Capula Management, Claren Road Asset Management and Trafalgar Asset Managers.

“What we are finding is that managers of varying sizes are either merging with or selling a stake in their businesses to larger institutions,” said Ron Geffner, who works with hedge funds as a partner at law firm Sadis & Goldberg. “And in many cases the primary reason is to gain access to better infrastructure and distribution.”

While many hedge funds once operated with only a few people out of a basement or garage, bigger investors who have helped double the industry’s assets to $2 trillion in the last three years are demanding more for their money.

Risk management, legal departments and top-notch back office operations are must haves for big name investors like the Massachusetts state pension fund, trustees and fund officials said. That fund plans to put more money into hedge funds in the months ahead.

For smaller funds managing only a few million dollars these types of costs can put them out of business very quickly, several small fund managers said.

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