Friday, January 01, 2010

"Completely, utterly wrong"

Jay Busbee at refers to "Waggle Room" as stating that the economics professors at UC/Davis were "completely, utterly wrong" in their analysis of the impact of the Woods event on the stock value of Woods' sponsors:

It's a further sign that the true story here isn't the parade of women claiming liaisons, but the financial impact on Woods' sponsors and the game of golf. As the Woods scandal slides off the tabloid pages and into the financial section, one story that's drawn plenty of attention in recent days is a report from two economics professors at the University of California, Davis that contends Woods has cost his sponsoring companies up to $12 billion in losses.

It's an interesting premise, the idea that Woods has actually cost thousands of investors billions of dollars. The professors reviewed stock market returns for the 13 trading days after Woods' infamous Thanksgiving evening accident. Comparing those returns to each sponsor's closest competitor as well as the previous four years of returns, the professors concluded that Woods had cost his sponsors -- including Accenture, AT&T, Electronic Arts, Proctor and Gamble, Nike and PepsiCo -- approximately 2.3 percent of their value, or about $12 billion.

However, Waggle Room took a much closer look at the figures, and decided that the UC professors' study was completely, utterly wrong -- that in fact Woods' sponsors have earned $1.5 billion since the accident. That link is must-reading for those interested in the financial side of this story, but in sum -- the "losses" were paper losses, not actual cash, and Woods' impact on the sponsors is minimal because so little of their overall value is tied to Woods.

IPBiz notes that this would not be the first time California professors tried to pass off hogwash on the public.

Recall Lawrence Baker of Stanford making unrealistic projections about the value of Proposition 71 to sway California voters.


One stupid Stanford study on Proposition 71 is enough!

East Bay Times on Gilbert criticizing Baker over Prop 71 patent royalties

California dreamin' or California hoaxed?

And then, of course, there is Mark Lemley of Stanford, the guy who wrote that Gary Boone invented the integrated circuit and that the inventors of the transistor foresaw only applications in hearing aids. That was indeed completely, utterly wrong.
[In the transistor case, a non-existent article was relied upon; see WHAT THE STORY OF THE INVENTION OF THE TRANSISTOR TEACHES US ABOUT 21ST CENTURY PATENT PRACTICE

Keywords: Victor Stango [UC Davis Graduate School of Management ] and Christopher Knittel

**On dreams, note

Deirdre Barrett says there are countless anecdotal reports of dreams helping people solve problems, including two Nobel Prize winners who claim their breakthroughs came to them in their dreams.

Nobel laureate Otto Loewi famously credited a dream for providing the experiment that allowed him to prove that the transmission of nerve impulses was chemical and not electrical.


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