Cheating, parenting, and Generation “me”

Posted on by

I just read an interesting New York Times article entitled “Studies find more students cheating, with high achievers no exception.”  The article is available here: 20120907-Cheating.  Allow me to comment on the article a bit…

Internet access has made cheating easier, enabling students to connect instantly with answers, friends…and works to plagiarize. …a major factor in unethical behavior is simply how easy or hard it is.

… the more online tools college students were allowed to use to complete an assignment, the more likely they were to copy the work of others.

Although the Internet is a productivity-enhancing technological innovation it is also a cheating-enhancing innovation.

An increased emphasis on having students work in teams may also have played a role.

It is my opinion that the article is unclear how group projects relate to cheating.  Any thoughts?  I suspect that the point was sense of ownership diminishes with the pervasiveness of free information.  With no perceived ownership there can not be any perceived cheating.   That lack of ownership sense may be present in a group where no individual feels that they “own” the project.    I don’t know.  I do not quite get the group projects lead to cheating connection.

…frequently reinforcing standards, to both students and teachers, can lessen cheating.

Sutdents in my classes: please revisit the Academic Dishonesty section of my syllabi. 🙂

When you start giving take-home exams and telling kids not to talk about it, or you let them carry smartphones into tests, it’s an invitation to cheating.

Agreed.  But do not worry.  I don’t do take home tests nor allow smartphones!

…since the 1960s, parenting has shifted away from emphasizing obedience, honor and respect for authority to promoting children’s happiness while stoking their ambitions for material success.

There has been a time or two I have seen students, even at the MBA level, demonstrate a lack of respect for authority.  However, I do not recall that being a problem with any students who served in the military.  Radical thought of this post: Perhaps compulsory military service should be law in this country.

We have a culture now where we have real trouble accepting that our kids make mistakes and fail, and when they do, we tend to blame someone else.  Thirty, 40 years ago, the parent would come in and grab the kid by the ear, yell at him and drag him home.

My parents were definitely in my corner.  But they also disciplined me.  In the “it wasn’t funny then, but it is funny now” category, I remember an incident where I was being mischievous at school.  The teacher took me to the principal’s office and called my mother.  She told me in a very calm sweet voice “don’t worry son, I will be right there.”  Upon her arrival I noticed the  copper core cloth-braided cord from an old iron (mom’s “discipline rod” of choice).  Something bad was about to happen… to me! She wore me out in front of class.  Unlike the article suggests, she did not drag me home after the yelling.  She made me sit back in my seat, remain silent, and do what I was told.  Thank you momma, I needed that!  You did it because you loved me.

If you received more of the “my child does nothing wrong” treatment growing up rather than the “grabbing by the ear,” do not worry. It is not too late to get the latter treatment.  I won’t use a copper cord, I’ll just give challenging exams and remind you that you are responsible for your grade.  Love you too!

Facebook CEO pledges not to sell stock?

Posted on by

I just read an interesting USA Today article (FacebookCEOSellPledge) about the jump in Facebook stock due to the CEO’s pledge not to sell.  A few comments on the article:

  1. This pledge was not done in the shareholder’s best interests.  In was done in the CEO’s best interests.
  2. The stock price is still less than half of the IPO price.
  3. Intentions and tax filings change.  Two board members have no “present intention” to sell except to sell enough to cover their tax bills.  I imagine the amount sold to “cover” the tax bill is just as subject to manipulation as the tax filing itself!
  4. Investment banks are still trying to transfer wealth from the poor masses to themselves.  Large underwriters, who likely own shares themselves, sure have some lofty price targets of $30 to $45 from the present $18.60.  “Buy.”  “Overweight.”  I say do not trust them.  Don’t buy.  Don’t overweight.  The same recommendations I gave pre-IPO.
  5. The investment banks handling the IPO are facing dozens of shareholder lawsuits.
  6. More trickery word play “get past the impact” really means “cash out as soon as possible.”  To “get past the impact of sales by those who bought or were given shares at the time of the IPO” Facebook is allowing those people to sell two weeks earlier!  Does that sound fishy to you?  What does another two weeks matter?  These folks want to cash out as soon as possible.

In summary, I did not purchase Facebook.  I would not have even if I were a privileged investor allowed to participate in the IPO.  Several state pension plans were tricked into it.  Now, if I did make the mistake of purchasing the hype, I surely would not wait until employee, investment bank, board member, and CEO stock sales start to happen!

Public pension funds stung by Facebook’s falling stock – latimes.com

Posted on by

My comments

Allow me to make a couple comments before you read the article…

What valuation model did they use?

As I started reading this article I could not help but think “what valuation model did the experts at the public pension funds use?”  Facebook allegedly was worth $100B at IPO.  I, as well as students at Sacramento State, used a simple discounted free cash flow model (XC_FB) and came up with about $17B.  Thus, the true value of facebook’s stock at IPO should have been:

A far cry from $38.  Still room to drop with the current stock price at 18.06.

My concerns as a new employee in the CalPERs system

I have two concerns.  First, CalPERs not get duped.  Second, now that they have lost money the article below suggests continued losses:

… could lead pension funds to pursue riskier investments such as hedge funds, private equity, commodities and real estate, or even cut benefits for retirees.

Lose money then take more risk?  I would say cut your losses and sell all of the FB stock, cut payouts to existing and future pensioners, and go with more conservative investments.  But that is just my opinion.  For more on this topic see The Cadence of Finance presentation.

The article…

latimes.com/business/la-fi-0901-facebook-pensions-20120901,0,444913.story

latimes.com

Public pension funds stung by Facebook’s falling stock

Public pension funds from around the country took part in Facebook’s IPO. The shares fell Friday to a record low of $18.06, or less than half their IPO price.

By Andrew Tangel, Los Angeles Times

5:31 PM PDT, August 31, 2012

NEW YORK — Wall Street investors aren’t the only ones feeling the sting of Facebook Inc.’s falling stock: So are some of the country’s troubled government pension funds.

Public employee retirement funds from around the country took part in the Menlo Park, Calif., social networking juggernaut’s May 18 initial public offering and plowed millions of dollars into Facebook stock before its value plunged.

Facebook shares continued their decline Friday, falling $1.03, or 5.4%, to a record low of $18.06, or less than half their $38 offering price.

Although public pension funds staked only tiny portions of their multibillion-dollar portfolios on Facebook’s fortunes, the stock’s poor performance has added to the funds’ woes. Chronic underfunding and poor returns could lead pension funds to pursue riskier investments such as hedge funds, private equity, commodities and real estate, or even cut benefits for retirees.

Three pension funds have joined a class-action lawsuit against Facebook and its underwriters. The suit, filed in U.S. District Court in Manhattan, N.Y., alleges that lead underwriters led by Morgan Stanley gave only some select investors a heads-up that Facebook’s revenue forecast had soured.

“We expect Facebook and the people who benefited from that sale to pay up,” said George Hopkins, executive director of the Arkansas Teacher Retirement System, which has lost about $2.9 million on about 142,500 Facebook shares it has kept from the IPO.

The Arkansas teacher pension fund is part of a group of institutional investors that includes the Fresno County Employees’ Retirement Assn. (estimated Facebook losses: $1 million) and the North Carolina Retirement Systems (estimated losses: $12.4 million). The group has filed papers seeking to become lead plaintiffs in the case.

Two major California pensions also bet big on Facebook.

The California Public Employees’ Retirement System, the country’s largest public pension, refused to reveal how many shares it bought in the IPO. CalPERS had 557,140 Facebook shares on May 23 and more than doubled its stake to 1.3 million shares as of this week, according to a spokeswoman.

The California State Teachers’ Retirement System bought about 500,000 shares in the IPO — worth about $19 million — and sold them when the price briefly popped on the first day. CalSTRS made about $250,000 on the sale, a spokesman said.

CalSTRS has since loaded up on 1.2 million Facebook shares, a stake that has cost the pension fund about $17 million in paper losses, a spokesman said.

“As a patient, long-term investor with a 30-year investment horizon we believe that over time, the stock and the company should perform well,” CalSTRS spokesman Michael Sicilia said in an email.

Facebook’s IPO was fraught with problems. First there was trouble with the Nasdaq Stock Market’s trading system, which delayed the offering and then botched early trading, costing Wall Street brokerages an estimated $500 million. Then came revelations of selective disclosure about Facebook’s declining fortunes.

The stock has since languished and could see more pressure as company insiders become eligible to sell more than 1.2 billion shares later this year.

Facebook did not respond to a request for comment.

Still, pension funds don’t plan to eschew future IPOs because of their experience with Facebook.

“We can’t swear off of them entirely — we’d be missing out on a big piece of the equity market,” said Phil Kapler, head of the Fresno County Employees’ Retirement Assn., who noted that every public company at some point came to the market in an IPO.

Research by Jay Ritter, a professor of finance at the University of Florida who has studied initial public offerings, shows that average three-year returns of IPOs from 1980 until 2010 have underperformed the broader stock market by 19.7%.

But companies with more than $500 million in sales before their IPOs had average three-year returns that beat the market by 2.6%, according to Ritter’s research.

“I would not recommend excluding all IPOs as part of a diversified portfolio,” Ritter said.

andrew.tangel@latimes.com

Copyright © 2012, Los Angeles Times