On Feb. 3, four professors of finance at the Gabelli School of Business came together to try to make sense of it all.

“GameStop: Comedy? Tragedy? or Both?”—an hour-long virtual discussion—brought together Sris Chatterjee, Ph.D., Gabelli Chair in Global Security Analysis; James Russell Kelly, senior lecturer, finance and business economics; Kevin Mirabile, D.P.S., clinical associate professor, finance and business economics; and Steven Raymar, Ph.D., associate professor and area chair, finance and business economics.

The webinar, which was moderated by Gabelli School Dean Donna M. Rapaccioli, Ph.D., delved deep into the vagaries of the stock market that led to the GameStop saga, from call options to delta hedging and gamma squeezes. There was also discussion about whether the meteoric rise of GameStop’s stock price, which was driven by members of the Reddit forum r/wallstreetbets, was a one-off event or the start of a trend of market disruption.

From a historical perspective, it was unprecedented. On Jan. 15, Mirabile noted, approximately 62 million shares of GameStop shares were sold short, which occurs when an investor borrows stock shares and sells them on the open market, planning to buy them back later for less. This was unusual because the company only has 70 million shares, and normally only 5 to 25% of a company’s shares are sold short at any point in time.

Because prominent hedge funds such as Melvin Capital had taken a position that the stock would decrease, they lost billions when investors such as Reddit followers of r/wallstreetbets drove the price to an astronomical $483 a share on Jan. 28.

The story took another turn when Robinhood, the free app that the Redditors had used to make the trades, suspended trading in GameStop, enraging retail investors.

Raymar voiced skepticism that it’s necessary to impose new government regulations.

“Is it best for investors? Who would it penalize? Some of the free thinkers in Reddit? Just think how that would play out when everyone understands how courts as high as the Supreme Court have essentially made it impossible to prosecute insider trading,” he said.

Kelly said the chaos reminded him of a section of the book Pitch: The Perfect Investment (Wiley, 2017) where the authors note that the wisdom of the crowd can be transformed into madness when there is “a lack of diversity or independence of the participants.”

“What we have observed is both a bubble and a crash in GameStop over the past few weeks, caused by the madness of crowds. The Redditors are nothing more than speculators. They are the polar opposite of investors, which is what we teach our students to become at Fordham,” he said.

Kelly did also wonder how hedge funds’ risk management departments allowed them to take such spectacularly risky positions.

Mirabile pinned it on “a failure of the imagination.”

“When the Wall Street analysts were saying that the price of the stock was $14 a share, [hedge fund managers]perceived that the risk of new buyers entering the market was next to zero. What they failed to consider was that retail investors [using Robinhood]could act as a block, not as individuals,” he said.

Ultimately, Chatterjee said this is a warning that leaders should take seriously the genuine anger Americans have for the current status quo. He noted that just 10% of Americans control 80% of the market wealth, so it’s not surprising that the average American is not benefitting from the market.

“We all need an orderly capital market, but unless we’re able to convince everybody that this is to everybody’s benefit, we’re going to see more acts of ‘rebellion.’ The fact that we are having disruptions in the market, going back to 2008, means we are seeing the system show cracks,” he said.

Plant-Based Meat. Garrett Broad, Ph.D., assistant professor of communication and media studies and author, More Than Just Food (University of California Press, 2016)

There has been tremendous growth in the plant-based food sector over the last several years, and there are a number of reasons why 2018 could be the biggest year yet for this emerging market. First and foremost, concerns about health, the environment, and animal welfare have led to increased public demand for plant-based alternatives to meat and animal products that are tasty, affordable, and convenient. At the same time, there has been an explosion of entrepreneurial initiative and innovation, as well as organizing and advocacy, in an effort to get these products in stores, restaurants, and other food service locations across the country and around the world. The meat industry has certainly taken notice—some companies are concerned about the threat that plant-based products represent to their bottom line, but others are actually investing in plant-based foods to get in on the action at this early stage.

Protest Demonstrations. Heather Gautney, Ph.D., associate professor of sociology and budget committee advisor to Sen. Bernie Sanders (I-Vt.)

In 2018, look for large-scale demonstrations and targeted protest activity outside the White House and in the halls of the U.S. Capitol, especially over immigrants’ rights. Following last year’s Women’s March, there remains a core group of women activists who continue to organize. A few months ago they put on a large-scale conference, and have an ongoing, committed project of movement-building around women’s issues.

[And] there are lots of ways for people to protest besides tens of thousands of people assembling in the street. On immigration round-ups and the issue of sanctuary cities, I think there may be widespread local demonstrations and acts of mass disobedience—protecting people from being taken away. There are all sorts of micro forms of resistance that can take place within communities. When the health care debates were happening in Washington D.C., when demonstrators where showing up at town hall meetings and shaming their congressmen and senators, I think that made a substantial impact on what happened to the outcome.

Internet Service. Olivier Sylvain, associate professor of law and director, McGannon Center for Communications Research

Now that the Federal Communications Commission has repealed “network neutrality” regulations that prohibited internet service providers like Comcast and Verizon from privileging some content over others, we will all want to closely monitor the quality of our internet service.  The FCC Chairman claims that the prior rules made it difficult for providers to invest in novel new services.  Those rules, however, barred service providers from exploiting their coveted gatekeeping market position to discriminate against disruptive competitors; they prohibited, for example, providers from making it costlier for then-emergent start-ups–with names like Amazon and Netflix–to become market-makers in video distribution.

Now that network neutrality is gone, we should keep our eyes on the quality of video on Amazon and Netflix.  We should also watch for subscription fees increases for those services.

Mergers and Acquisitions. Sris Chatterjee, Ph.D., professor and chair of global security analysis finance and business economics, Gabelli School of Business

2017 has been a very good year for M&A. With the economy continuing to show strong fundamentals and the new tax law, 2018 is most likely to continue this upward trend in merger activity.

FinTech and digital technology represent a major disruptive force that will shape many mergers in 2018. We have already started to see this trend in 2017 when many companies across different industries outside the tech-sector acquired firms with the desired digital capabilities. This trend will also continue in 2018. Acquisition of American or European companies with an established brand name and market by firms in China, India and other non-Western countries has been another feature of M&A activity in recent times. This is also likely to continue.

These positive aspects of a stronger M&A outlook in 2018 need to be balanced against other factors that may have a restraining effect. The first factor that comes to mind is the effect of the U.S. government’s decision to block the AT&T-Time Warner merger. AT&T is fighting this decision in court and the outcome will have an important effect on M&A activity in 2018. The second factor to consider is that market multiples are already high, perhaps too high in light of meager growth. This, coupled with the high average premium that we witnessed in 2017, means that deals, on average, are going to be pricey.

Vatican Fashion. J. Patrick Hornbeck, Ph.D., associate professor of theology and department chair

Of late, the fashion world has been demonstrating increasing interest in things religious: consider, for instance, Alexander Wang’s 2016 show at St. Bartholomew’s Church on Park Avenue. But the Costume Institute of the Metropolitan Museum of Art will take this trend a step further with its 2018 exhibition, “Heavenly Bodies: Fashion and the Catholic Imagination.” The exhibition pairs liturgical and ceremonial vestments and artworks from the Met collection with designer garments inspired in some way by Catholicism. Traditionalist Catholic groups have sometimes responded with alarm to artistic displays that appear to mock or satirize their faith. The new Met exhibit (which opens in May) may encounter resistance from such quarters, but local Catholic leaders were consulted in the planning process. And the Vatican itself loaned more than 50 of the pieces that will be on display. In the end, the Met may more than anything else showcase the manifold ways in which the Catholic tradition continues to inspire artists of all stripes.

Historically Black Colleges and Universities. Shannon Waite, Ed.D., clinical assistant professor in the Graduate School of Education

In 2018, I predict that Historically Black Colleges and Universities (HBCUs) will become more diverse and that the conversation will broaden from being focused on race and ethnicity to include socio-economic status.  I would pay attention to how the cuts to programs and initiatives that indirectly support HBCU’s and/or the students they serve impact the student’s access to higher education. I also expect the conversation about whether these institutions can continue to fulfill the role they have historically played and remain viable options for the demographic of students they traditionally serve to become more prominent.  I expect questions about whether HBCUs still have a place in our society today to become a part of the conversation that will spark a national debate.  Finally, I would pay attention to how the current administration responds to the criticism that the commitment made to bolster HBUCs has not been honored.

Bitcoin. Giacomo Santangelo, Ph.D., senior lecturer of economics

Much like international currencies, people trade Bitcoin to exploit arbitrage opportunities (buy low, sell high) in the market. However, today the bitcoin has more in common with Beanie Babies from the 1990s than with international currencies. The market for Bitcoin is being driven by speculation, not investment. Speculators buy an asset, often taking huge risks, in the hopes of making ’a quick buck.’ It would have been ill-advised to invest your retirement in Beanie Babies or Pokemon cards in the 1990s; although, at the time, you could make fast money buying/selling on eBay . . . until you couldn’t. Whether Bitcoin will eventually settle at $20k, $1 Million, or $1, the volatility of the recent weeks indicates that when speculators lose interest in Bitcoin, the bubble will burst. The bitcoin will only continue to have ‘value’ if people continue to believe it has value. At the moment, people have no rational reason to do so. It is unlikely Bitcoin will continue a meteoric rise, uninterrupted, in 2018.

Helicopter Parenting and Hovering. Rachel Annunziato, Ph.D., associate professor of psychology and head of Fordham’s Pediatric Psychology & Health Behaviors group

We are in an era where parenting styles—such as helicopter, or hovering— are raising concerns about our children’s ability to develop independence and advocate for themselves. Indeed, in the medical community during the last decade there has been a push for adolescents to learn early how to self-manage their special health care needs.

My colleagues and I have been studying this process among a large sample of adolescents from around the country. We found that adolescents who say they are self-managing (versus those having more parental involvement) and those who say they are doing more than their parents think they are, have worse outcomes. This includes difficulty managing their medications. These findings perhaps signal that for some adolescents, it is critical to work with their parents rather than move them into the background. So [going forward]maybe a little hovering is okay.

Real Estate’s Downward and Upward Trends. Hugh F. Kelly, Ph.D., special advisor to Fordham’s Real Estate Institute in the School for Professional and Continuing Studies

The 2018 outlook for commercial properties in New York is mixed. Tenant demand for office space is strengthening on the basis of strong job growth in finance and business/professional services. These job gains are timely, as a new generation of offices is coming to market in significant volume. Lateral movement amongst corporate users should continue, creating vacancy in some older buildings. But high prices and low cap rates will keep overall transactions on a downward trend.

In retailing, especially storefront properties on high-traffic avenues, vacancy is quite high, as asking rents have tended to exceed the price that can be economically supported by stores sales. I’d expect capitulation from landlords if that trend intensifies; low returns are better than no returns.

The residential market is sorting out an excess of luxury development while dealing with the ongoing crisis of affordability. As a result, multifamily construction in the outer boroughs may be 2018’s most significant trend.

(Patrick Verel, Tom Stoelker, and Tanisia Morris contributed to the article.)

Sris Chatterjee, PhD, professor of finance, was installed as the inaugural Gabelli Chair in Global Security Analysis on Feb. 26 at the Rose Hill campus.

Joseph M. McShane, SJ, president of Fordham, called the event an evening for multiple celebrations. In addition to recognizing Chatterjee’s elevation, the University also announced on Feb. 25 the unification of the undergraduate and graduate business schools as the Gabelli School of Business.

Donna Rapaccioli, PhD, dean of the undergraduate business school, will assume leadership of the unified school. It will be based at Hughes Hall on the Rose Hill campus and in the former Fordham Law School building on the Lincoln Center campus.

“Having a single school led by an extraordinarily capable Dean Donna Rapaccioli will mean a better education for both graduate and undergraduate business students,” said Father McShane. “And putting both schools under the Gabelli name makes Fordham business more recognizable, both nationally and internationally.”

On hand for the installation were Mario Gabelli, GABELLI ’65, chairman and CEO of GAMCO Investors, Inc., and his wife, Regina M. Pitaro, FCRH ’76. Gabelli’s $25 million gift in 2010—the largest in Fordham history—made possible both the new chair and the Gabelli Center for Global Security Analysis, which is focused on value investing. Chatterjee’s research will complement the center’s work.

Gabelli said a top-notch university needs great facilities, students, and professors. By funding a chair in global security analysis, he said he hopes to pass on the opportunity to be inspired the way he was—first as a Fordham undergraduate and then as a Columbia University graduate student under Roger F. Murray, a giant in value investing.

“He was the first [Columbia] professor I had, and to the professors here today I say your influence is forever,” said Gabelli. “Roger put the sun, the moon, and the stars together for me.

“We’re delighted to bring value investing to Fordham, and to ignite it on both the undergraduate and graduate levels,” he said. “We’re delighted to have Sris to carry the banner.”

Rapaccioli called Chatterjee a consummate researcher and professor in the field of finance. Since joining Fordham in 1989, he has taught at both the undergraduate and graduate levels. He has served as associate dean for graduate business education and as finance area chair, and has also been a valued contributor to the Fordham Wall Street Council.

In his inaugural talk, “The Evolution of Value Investing,” Chatterjee highlighted the emergence of different styles of value investing and the status of current research in this area.

“The arc of evolution is almost a full circle, meaning that the current research that we have enriches and validates exactly what the original thinkers had in mind,” he said.

Benjamin Graham, author of the 1934 book Security Analysis, and his protégées David Dodd, Roger F. Murray, and Bruce Greenwald are the key advancers of value investing, said Chatterjee. The most accurate definition of it, he said, came from an annual 1985 Berkshire Hathaway report by Graham’s best student—Warren Buffett.

“It says that successful investing was the purchase of shares in good businesses when the market price was at a large discount from underlying business value—basically, buying a dollar for 50 cents,” he said.

Chatterjee said there remain disagreements over whether an investor should diversify (Murray and Graham) or concentrate (Buffett) a portfolio. There is little disagreement, however, on rejecting sentiment in decision making and rejecting the efficient market hypothesis, which says that the market has all the information it needs to establish a correct price.

“This is an important distinction,” he said. “In efficient market hypothesis, we are supposed to trust the prices and trust the market. Ben Graham had no trust in the market.

Instead, the core of value investing says “find a good business, invest in that business, and simply don’t look at the market. Hold that investment for 10, 20 years,” said Chatterjee.

Chatterjee said that the public doesn’t appreciate the benefits of value investing to society as a whole. He noted that Graham has bemoaned the public’s loss of confidence in the financial community, especially during times of recession. Academics, on the other hand, have a higher level of confidence, he said.

“My proposition is we make the Gabelli Center for Global Security Analysis a preeminent place for understanding all the subtleties and nuances of the capital market and investing that have come down to us from Graham and Dodd,” he said.

“Back in the 1960s, middle-class Indian families wanted their children—certainly their male children—to choose a career in engineering or medicine or law,” said Chatterjee, professor of finance in Fordham’s Schools of Business. “My elder brother was a role model for me. So, I tried to follow his footsteps by studying at the Indian Institute of Technology.”

Chatterjee graduated with a bachelor’s degree in engineering and worked at the Associated Cement Companies for four years before it became apparent that mechanical engineering wasn’t his passion.

“My experience convinced me that India’s problems had more to do with bad management than with bad or insufficient technology,” he said.

He returned to school to pursue a master’s degree in management at the Indian Institute of Management (IIM), and then came to Columbia University for his doctorate.

It was a professor at Columbia who inspired Chatterjee to pursue a degree in finance, though Chatterjee said he first became interested in the subject as a student at IIM (Calcutta): “It seemed more analytical, which fit with my engineering background.”

The true test, however, was when he faced a crossroads while he was attending Columbia: the chance to pursue a doctorate in finance or marketing.

“A famous [marketing]academic asked asked me to consider the opportunity of working with him. Alas, I did not know at that time the famous advice from Yogi Berra: when you come to a fork in the road, you should take it!” joked Chatterjee, an avid Yankees fan.

More than 20 years later, Chatterjee continues to progress in his career in finance and academia, most recently with a new appointment as associate dean for graduate business education.

On the heels of two consecutive terms as the area chair of finance and business economics—the maximum terms one faculty member can hold in the post—Chatterjee will now share the insights he has gained from that leadership to support the Graduate School of Business Administration (GBA) as it evolves to educate today’s global business leaders.

“I am grateful that Sris Chatterjee has agreed to take on the responsibilities of this newly created position,” said David Gautschi, Ph.D., dean of GBA, who selected Chatterjee for the role. “Sris brings a wealth of experience that he has gained after serving two terms as chair of the finance area of the business faculty.”

According to Gautschi, Chatterjee has been involved in program development and program management in GBA’s finance area, and was instrumental in launching the Master of Science in Global Finance with Peking University.

“He has been a leader in creating a climate within the schools that is conducive to faculty research. As associate dean for graduate business education, Sris will have general responsibility for the management of the expanding number of master’s programs at GBA. His knowledge of the school, its faculty, students, and curricula will be put to good use as GBA prepares for the five-year maintenance of accreditation review by the Association to Advance Collegiate Schools of Business.”

When Chatterjee arrived at Fordham in 1989, the business schools were in the midst of significant growth, as they are today. Now, the emphasis at GBA is on new specialized master’s programs—eight were introduced in the past year alone—and on recruiting new faculty.

The demand for an evolved MBA and new, specialized master’s programs is attributable in part, Chatterjee explains, to a declining number of jobs in the financial services sector. “There is a demand for market-ready MBA graduates who have a multiplicity of skills and who can work effectively in a globally diversified workplace.” An increasing emphasis on entrepreneurship and innovation also fuels the need.

Chatterjee looks forward to developing the curricula of the School’s MBA and MS programs. “In addition to the MBA program, we have 11 master’s degree programs in various management disciplines, and a few more are in the pipeline,” he said. “There are similarities among these programs, and differences. I think both Deans Gautschi and [Donna] Rapaccioli, [dean of the undergraduate Gabelli School of Business]felt that there should be someone to coordinate them. That’s mainly what my job will be.” Curriculum reform will be implemented, designed and configured by faculty, with Chatterjee hoping to “facilitate and help move the process forward.”

Chatterjee has been instrumental in several initiatives launched by GBA, including The Fordham Wall Street Council, established in 2010. This group was formed to foster collaboration among GBA alumni, faculty, students, and friends interested in the various sectors of finance and the capital markets.

His experience as area chair and his involvement with University activities, such as the Faculty Senate, Dean Search Committee and University Budget Committee have enabled Chatterjee to work closely with faculty and administration and learn more about the Fordham community, its values, and its mission—all of which will be useful in his new post.

“Fordham Schools of Business have really grown significantly, not just in terms of programs, but also in research productivity,” he said. “We can feel legitimately proud that we have moved to a higher gear here at GBA. But more can be done.”

– Claire Curry

By Claire Curry

Long before heading to the United States to study business at Columbia University, Sris Chatterjee, Ph.D., was on the road to a career in mechanical engineering in his native India.

“Back in the 1960s, middle-class Indian families wanted their children—certainly their male children—to choose a career in engineering or medicine or law,” said Chatterjee, professor of finance in Fordham’s Schools of Business. “My elder brother was a role model for me. So, I tried to follow his footsteps by studying at the Indian Institute of Technology.”

Chatterjee graduated with a bachelor’s degree in engineering and worked at the Associated Cement Companies for four years before it became apparent that mechanical engineering wasn’t his passion.

“My experience convinced me that India’s problems had more to do with bad management than with bad or insufficient technology,” he said.

He returned to school to pursue a master’s degree in management at the Indian Institute of Management (IIM), and then came to Columbia University for his doctorate.

It was a professor at Columbia who inspired Chatterjee to pursue a degree in finance, though Chatterjee said he first became interested in the subject as a student at IIM (Calcutta): “It seemed more analytical, which fit with my engineering background.”

The true test, however, was when he faced a crossroads while he was attending Columbia: the chance to pursue a doctorate in finance or marketing.

“A famous [marketing]academic asked asked me to consider the opportunity of working with him. Alas, I did not know at that time the famous advice from Yogi Berra: when you come to a fork in the road, you should take it!” joked Chatterjee, an avid Yankees fan.

More than 20 years later, Chatterjee continues to progress in his career in finance and academia, most recently with a new appointment as associate dean for graduate business education.

On the heels of two consecutive terms as the area chair of finance and business economics—the maximum terms one faculty member can hold in the post—Chatterjee will now share the insights he has gained from that leadership to support the Graduate School of Business Administration (GBA) as it evolves to educate today’s global business leaders.

“I am grateful that Sris Chatterjee has agreed to take on the responsibilities of this newly created position,” said David Gautschi, Ph.D., dean of GBA, who selected Chatterjee for the role. “Sris brings a wealth of experience that he has gained after serving two terms as chair of the finance area of the business faculty.”

According to Gautschi, Chatterjee has been involved in program development and program management in GBA’s finance area, and was instrumental in launching the Master of Science in Global Finance with Peking University.

“He has been a leader in creating a climate within the schools that is conducive to faculty research. As associate dean for graduate business education, Sris will have general responsibility for the management of the expanding number of master’s programs at GBA. His knowledge of the school, its faculty, students, and curricula will be put to good use as GBA prepares for the five-year maintenance of accreditation review by the Association to Advance Collegiate Schools of Business.”

When Chatterjee arrived at Fordham in 1989, the business schools were in the midst of significant growth, as they are today. Now, the emphasis at GBA is on new specialized master’s programs—eight were introduced in the past year alone—and on recruiting new faculty.

The demand for an evolved MBA and new, specialized master’s programs is attributable in part, Chatterjee explains, to a declining number of jobs in the financial services sector. “There is a demand for market-ready MBA graduates who have a multiplicity of skills and who can work effectively in a globally diversified workplace.” An increasing emphasis on entrepreneurship and innovation also fuels the need.

Chatterjee looks forward to developing the curricula of the School’s MBA and MS programs. “In addition to the MBA program, we have 11 master’s degree programs in various management disciplines, and a few more are in the pipeline,” he said. “There are similarities among these programs, and differences. I think both Deans Gautschi and [Donna] Rapaccioli, [dean of the undergraduate Gabelli School of Business]felt that there should be someone to coordinate them. That’s mainly what my job will be.” Curriculum reform will be implemented, designed and configured by faculty, with Chatterjee hoping to “facilitate and help move the process forward.”

Chatterjee has been instrumental in several initiatives launched by GBA, including The Fordham Wall Street Council, established in 2010. This group was formed to foster collaboration among GBA alumni, faculty, students, and friends interested in the various sectors of finance and the capital markets.

His experience as area chair and his involvement with University activities, such as the Faculty Senate, Dean Search Committee and University Budget Committee have enabled Chatterjee to work closely with faculty and administration and learn more about the Fordham community, its values, and its mission—all of which will be useful in his new post.

“Fordham Schools of Business have really grown significantly, not just in terms of programs, but also in research productivity,” he said. “We can feel legitimately proud that we have moved to a higher gear here at GBA. But more can be done.”