Outperformance of market
(Cont.):
initial public offerings and,
154–157, 156i
nature of growth and value
stocks and, 157
price-earnings ratios and,
149–150, 151i
price-to-book ratios and, 150,
152
small-versuslarge-cap stocks
and, 141–144, 142i
valueversusgrowth stocks
and, 144–145
Overconfidence, 325–328
Overspeculation, warnings of,
86–88
Panic of 1907, 231
Paper money, value of, 11n
Paper money standard, shift to,
9–10
Passive investing, 351
Patel, Jayendu, 348n
Payroll survey, 241
Pearl Harbor attack, 233
Penick & Ford, 60i, 62
Pension costs, controversies in
accounting for, 105–107
Pension plans, funding of, 106
Pension Protection Act of 2006,
106
Peoples Energy Corp., 48
Peoples Gas Light & Coke Co.,
48
Pepsi-Cola Co., 59i, 61, 64
Personal consumption
expenditure (PCE) deflator,
246
PetroChina, 177, 182
Pettengill, Glenn N., 303n
Petty, Damon, 147
Pfizer, 59i, 109, 176i, 177
Philip Morris, 58–61, 59i, 60i,
62
Phillips Petroleum, 54–55, 56i,
57
PIMCO, 90
Pioneering Portfolio Management:
An Unconventional Approach to
Institutional Investment
(Swensen), 90
Polefka, J., 326n
Political parties, market move-
ments and, 227–228, 228i–230i,
230
Population, world, 162, 163i,
164
Portfolio allocations, recom-
mended, 34–35, 34i
Portfolio insurance, 273, 275
Portfolio monitoring, 332–333
Portfolios, structuring for long-
term growth, 359–365
Positive liquidity shocks, 159
Poterba, James M., 224n
Powershares, 356
Precommitment, 331
Premiums:
equity risk, 16–18, 17i,
332–333
futures contracts and, 258
on options, 265
President, uncertainty about,
226–227
Price-earnings (P-E) ratio,
110–112, 111i
for formulating winning
strategy, 149–150, 151i
future stock returns and,
111–112, 113i
ratio of market value to, 120,
120 i
Price-to-book ratio, formulating
winning strategy using, 150,
152
Price-weighted indexes, 40
Prices:
historical, 117
next best, 275
Nixon’s freezing of, 194
nominal, 70
of stock (seeStock prices)
strike, of options, 265
Primary wave, 290
Pring, Martin J., 290Procter & Gamble, 59i, 62, 144,
176 i, 177
Proctor, William, 65n
Producer price index (PPI),
244–245
Profits:
ratio to national income,
market valuation and,
115–116, 116i
(See alsoEarnings)
Program traders, 255
Programmed trading, 258
Prospect theory, 322–323,
328–330
Public capital, in global mar-
kets, 177–178
Purchasing managers index
(PMI), 243
Purchasing power, growth of,
11–12, 11i
Purchasing power parity, 173
Puts, 264
in-the-money, 266
out-of-the-money, 266Quality of earnings, 108–109
Quantum Chemical Corp., 48
Quest Communications, 64Ramaswamy, Krishna, 145
Random walk, 29, 29i, 291–292
A Random Walk Down Wall Street
(Malkiel), 303
Raskob, John J., 3–5
Rational theory of consumer
choice, 322
Reagan, Ronald, 274
Real returns, 112
annual, in United States, 20
on fixed-income assets,
14–16, 15i
total, growth of, 11–12, 11i
Rebalancing, of fundamentally
weighted portfolios, 355
Regulation Q, 8
Reported earnings, 102–104
Representative bias, 326
Research Affiliates, 356376 Index