John works with strategic communications and consulting firm Three Part Advisors, to assist them in their investor relations practice, and is a Lecturer in Management at Rice University’s Jones Graduate School of Management, where he teaches investor relations. Prior to this, John was in charge of investor relations for Sysco Corporation and Walgreen Co. He holds a MBA from the Kellogg Graduate School of Management at Northwestern University and a law degree from Loyola University of Chicago.
You can learn more about John’s thinking about investor relations at his blog, Investor Relations Musings.
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Boiled down to its essence, investor relations is consultative selling.
Investor relations professionals want the right type of customers (investors) to buy a piece of their company (stock) and to have a good ownership experience (own the stock for a long period of time).
The potential market for a company’s stock is vast, covering institutional investors and individual investors, who can be either domestic or foreign. Because the market is far larger than can be … Read the rest
The efficient market hypothesis is a key concept covered in finance classes during the first year of business school. Because it is considered a finance concept, you rarely hear it discussed in the context of investor relations, but it has a key role to play.
In its simplest form, the efficient market hypothesis states that security prices fully reflect all available information. The implications of this seemingly simple statement are profound, because if current stock … Read the rest
Academics are big on constructing hypothetical models to prove their financial theories. They blithely disregard such things as taxes, transaction costs and the fact that emotional, sometimes illogical humans are part of the market process. In short, they don’t allow messy reality to interfere with their elegant equations. Many an academic prize (and even some Nobel Prizes) have been won by building explanatory models that make such huge assumptions. In fact, my favorite quote about … Read the rest
In my last post I talked about the role of financial theory in dictating that more forward-looking information be provided by investor relations.
In short, if financial theory holds that that the value of a firm is equal to the sum of its future cash flows, discounted back to a present value, then one of the jobs of investor relations is to provide enough forward-looking information to investors to allow them to make reasonable estimates … Read the rest
During their first year of business school, MBA students are taught that traditional financial theory holds that the value of a firm is equal to the sum of its future cash flows, discounted back to a present value.
While this is fairly simple to express, quite a bit of financial calculation goes into coming up with the final value, including making estimates of future cash flows, figuring a terminal value, risks to be considered in … Read the rest
