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Black Scholes analysis



You may have heard this morning that two Americans, Robert Merton and Myron
Scholes, won the Nobel prize in Economics. U-S-A! U-S-A! (Americans have
tended to dominate this catagory for years). 

They were awarded the prize for their formula, used to value stock options
(for derivatives), the formula can also be used for determining the value
of liabilities of a firm, debt, share price, equity, or preferred stock.

There is information on the web for this formula. It is a beast, but there
is a site with the formula, and code to make it all happen automagically on
the computer. Check out: 

http://finance.bi.no/~bernt/gcc_prog/algoritms/algoritms/node6.html

I think it would be cool to be the only Investment group on the planet to
use Nobel prize-winning technology to help pick stocks. 

It may be a bit much to try to use this in our presentations, (nope, Jim,
Gary and Joe -'can't be done, it's a shame really...) but if anyone wants
to have a look to see if you think this is at all worth attempting, please
have at it. The industry apparently uses this stuff all the time now.

In less than two weeks, we'll have our next meeting (My place, 6pm, Oct.
26th). Joe and Sean will be joining us by phone, so I'd like to start
promptly.

See you then.

-G

Ps. Congratulations to Al and Trish Sitterson on the birth of Taylor Shea
on Oct. 13th!