Lauren H. Cohen

Professor of Business Administration

Lauren Cohen is a Professor in the Finance area at Harvard Business School, an Editor of Management Science, and a Faculty Research Fellow at the National Bureau of Economic Research. He has also served on the editorial boards of the Review of Financial Studies and the Review of Asset Pricing Studies.  Prior to joining HBS, he was an Assistant Professor of Finance at Yale University, in the School of Management, where he was on the faculty from 2005-2007. 

His award-winning research has been published in the top journals in Finance and Economics. It is also frequently described in various media outlets including The Wall Street JournalThe New York TimesThe Washington Post, Fortune, and Forbes.  He is the recipient of a National Science Foundation (NSF) Early Career Development Award for his research agenda on Relationships in Finance.  Dr. Cohen received a PhD in finance and an MBA from the University of Chicago in 2005.  He earned dual undergraduate degrees from the University of Pennsylvania - a BSE from the Wharton School and a BA in economics from the College of Arts & Sciences in 2001.  He serves on the advisory board of Quadriserv, Inc.

Journal Articles

  1. Legislating Stock Prices

    Lauren Cohen, Karl Diether and Christopher Malloy

    We demonstrate that legislation has a simple, yet previously undetected impact on stock prices. Exploiting the voting record of legislators whose constituents are the affected industries, we show that the votes of these "interested" legislators capture important information seemingly ignored by the market. A long-short portfolio based on these legislators' views earns abnormal returns of over 90 basis points per month following the passage of legislation. Industries that we classify as beneficiaries of legislation experience significantly more positive earnings surprises and positive analyst revisions in the months following passage of the bill, as well as significantly higher future sales and profitability. We show that the more complex the legislation, the more difficulty the market has in assessing the impact of these bills; further, the more concentrated the legislator's interest in the industry, the more informative are her votes for future returns.

    Keywords: legislator incentives; voting; Return Predictability; lobbying; Motivation and Incentives; Government Legislation; Stocks;


    Cohen, Lauren, Karl Diether, and Christopher Malloy. "Legislating Stock Prices." Journal of Financial Economics 110, no. 3 (December 2013): 574–595. (Winner of Fama-DFA Prize for the Best Paper Published in the Journal of Financial Economics in Asset Pricing (Distinguished Paper) 2013.) View Details
  2. Friends in High Places

    Lauren Cohen and Christopher Malloy

    We demonstrate that personal connections amongst U.S. politicians have a significant impact on Senate voting behavior. Networks based on alumni connections between politicians are consistent predictors of voting behavior. We estimate sharp measures that control for common characteristics of the network, as well as heterogeneous impacts of a common network characteristic across votes. We find that the effect of alumni networks is close to 60% as large as the effect of state-level considerations. The network effects we identify are stronger for more tightly linked networks, and at times when votes are most valuable. We show that politicians use school ties as a mechanism to engage in vote trading ("logrolling"), and that alumni networks help facilitate the procurement of discretionary earmarks.

    Keywords: vote trading; networks; legislation; logrolling; earmarks; Voting; Government Legislation; Social and Collaborative Networks; United States;


    Cohen, Lauren, and Christopher Malloy. "Friends in High Places." American Economic Journal: Economic Policy 6, no. 3 (August 2014): 63–91. View Details
  3. Misvaluing Innovation

    Lauren Cohen, Karl Diether and Christopher Malloy

    We demonstrate that a firm's ability to innovate is predictable, persistent, and relatively simple to compute, and yet the stock market ignores the implications of past successes when valuing future innovation. We show that two firms that invest the exact same in research and development (R&D) can have quite divergent, but predictably divergent, future paths. Our approach is based on the simple premise that while future outcomes associated with R&D investment are uncertain, the past track records of firms may give insight into their potential for future success. We show that a long-short portfolio strategy that takes advantage of the information in past track records earns abnormal returns of roughly 11% per year. Importantly, these past track records also predict divergent future real outcomes in patents, patent citations, and new product innovations.

    Keywords: innovation; Return Predictability; R&D; Information; Forecasting and Prediction; Research and Development; Innovation and Invention;


    Cohen, Lauren, Karl Diether, and Christopher Malloy. "Misvaluing Innovation." Review of Financial Studies 26, no. 3 (March 2013). View Details
  4. Hiring Cheerleaders: Board Appointments of 'Independent' Directors

    Lauren Cohen, Andrea Frazzini and Christopher Malloy

    We provide evidence that firms appoint independent directors who are overly sympathetic to management, while still technically independent according to regulatory definitions. We explore a subset of independent directors for whom we have detailed, micro-level data on their views regarding the firm prior to being appointed to the board: sell-side analysts who are subsequently appointed to the boards of companies they previously covered. We find that boards appoint overly optimistic analysts who are also poor relative performers. The magnitude of the optimistic bias is large: 82.0% of appointed recommendations are strong-buy/buy recommendations, compared to 56.9% for all other analyst recommendations. We also show that appointed analysts' optimism is stronger at precisely those times when firms' benefits are larger. Lastly, we find that appointing firms are more likely to have management on the board nominating committee, appear to be poorly governed, and increase earnings management and CEO compensation following these board appointments.

    Keywords: Recruitment; Management; Corporate Governance; Performance; Governing and Advisory Boards; Executive Compensation; Governing Rules, Regulations, and Reforms; Prejudice and Bias;


    Cohen, Lauren, Andrea Frazzini, and Christopher Malloy. "Hiring Cheerleaders: Board Appointments of 'Independent' Directors." Management Science 58, no. 6 (June 2012): 1039–1058. View Details
  5. Decoding Inside Information

    Lauren Cohen, Christopher Malloy and Lukasz Pomorski

    Using a simple empirical strategy, we decode the information in insider trading. Exploiting the fact that insiders trade for a variety of reasons, we show that there is predictable, identifiable "routine" insider trading that is not informative for the future of firms. Stripping away the trades of routine insiders leaves a set of information-rich trades by "opportunistic" insiders that contain all the predictive power in the insider trading universe. A portfolio strategy that focuses solely on opportunistic traders yields value-weighted abnormal returns of 82 basis points per month, while the abnormal returns associated with routine traders are essentially zero. Further, opportunistic insiders predict future firm-specific news, as well as announcement returns around future analyst forecasts, management forecasts, and earnings announcements, while routine traders do not. The most informed opportunistic traders are local non-senior insiders, who come from geographically concentrated, poorly governed firms. Lastly, opportunistic traders are significantly more likely to have SEC enforcement action taken against them and reduce their trading following waves of SEC insider trading enforcement.

    Keywords: Strategy; Financial Markets; Forecasting and Prediction; Law Enforcement; Opportunities; Geographic Location; Business Earnings;


    Cohen, Lauren, Christopher Malloy, and Lukasz Pomorski. "Decoding Inside Information." Journal of Finance 67, no. 3 (June 2012): 1009–1043. (Winner of Chicago Quantitative Alliance Academic Paper Competition. First Prize presented by Chicago Quantitative Alliance.  Winner of Institute for Quantitative Investment Research (INQUIRE) Grant presented by Institute for Quantitative Investment Research.) View Details
  6. Complicated Firms

    Lauren Cohen and Dong Lou

    We exploit a novel setting in which the same piece of information affects two sets of firms: one set of firms requires straightforward processing to update prices, while the other set requires more complicated analyses to incorporate the same piece of information into prices. We document substantial return predictability from the set of easy-to-analyze firms to their more complicated peers. Specifically, a simple portfolio strategy that takes advantage of this straightforward vs. complicated information processing classification yields returns of 118 basis points per month. Consistent with processing complexity driving the return relation, we further show that the more complicated the firm, the more pronounced the return predictability. In addition, we find that sell-side analysts are subject to these same information processing constraints, as their forecast revisions of easy-to-analyze firms predict their future revisions of more complicated firms.

    Keywords: Investment Portfolio; Information; Price; Forecasting and Prediction; Complexity; Mathematical Methods;


    Cohen, Lauren, and Dong Lou. "Complicated Firms." Journal of Financial Economics 104, no. 2 (May 2012). (Winner of Istanbul Stock Exchange 25th Anniversary Best Paper Competition. First Prize presented by Istanbul Stock Exchange. Winner of Center for Research in Security Prices Forum. Best Paper Prize presented by University of Chicago Booth School of Business. Winner of Paul Woolley Centre for the Study of Capital Market Dysfunctionality. Academic Grant presented by Paul Woolley Centre for the Study of Capital Market Dysfunctionality. Winner of Crowell Memorial Prize For the best paper on quantitative investing presented by PanAgora Asset Management, Inc.) View Details
  7. Do Powerful Politicians Cause Corporate Downsizing?

    Lauren Cohen, Joshua Coval and Christopher J. Malloy

    This paper employs a new empirical approach for identifying the impact of government spending on the private sector. Our key innovation is to use changes in congressional committee chairmanship as a source of exogenous variation in state-level federal expenditures. In doing so, we show that fiscal spending shocks appear to significantly dampen corporate sector investment and employment activity. This retrenchment follows both Senate and House committee chair changes, occurs in large and small firms and within large and small states, and is most pronounced among geographically concentrated firms. The effects are economically meaningful and the mechanism-entirely distinct from the more traditional interest rate and tax channels-suggests new considerations in assessing the impact of government spending on private sector economic activity.

    Keywords: Spending; Private Sector; Taxation; Innovation and Invention; Interest Rates; Business and Government Relations; Investment; Employment; Power and Influence;


    Cohen, Lauren, Joshua Coval, and Christopher J. Malloy. "Do Powerful Politicians Cause Corporate Downsizing?" Journal of Political Economy 119, no. 6 (December 2011): 1015–1060. (Click here for a response to Snyder and Welch, click here for the data, and click here for the code.) View Details
  8. Sell-Side School Ties

    Lauren H. Cohen, Christopher J. Malloy and Andrea Frazzini

    We study the impact of social networks on agents' ability to gather superior information about firms. Exploiting novel data on the educational backgrounds of sell-side equity analysts and senior officers of firms, we test the hypothesis that analysts' school ties to senior officers impart comparative information advantages in the production of analyst research. We find evidence that analysts outperform on their stock recommendations when they have an educational link to the company. A simple portfolio strategy of going long the buy recommendations with school ties and going short buy recommendations without ties earns returns of 6.60% per year. We test whether Regulation FD, targeted at impeding selective disclosure, constrained the use of direct access to senior management. We find a large effect: pre-Reg FD the return premium from school ties was 9.36% per year, while post-Reg FD the return premium was nearly zero and insignificant. In contrast, in an environment that did not change selective disclosure regulation (the U.K.), the analyst school-tie premium has remained large and significant over the entire sample period.

    Keywords: Investment Return; Investment Portfolio; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Knowledge Acquisition; Social and Collaborative Networks;


    Cohen, Lauren H., Christopher J. Malloy, and Andrea Frazzini. "Sell-Side School Ties." Journal of Finance 65, no. 4 (August 2010): 1409–1437. (Winner of Smith Breeden Prize for the Best Paper Published in the Journal of Finance in Asset Pricing (Distinguished Paper) 2010.) View Details
  9. Attracting Flows by Attracting Big Clients

    Lauren Cohen and Breno Schmidt

    We explore a new channel for attracting inflows using a unique dataset of corporate 401(k) retirement plans and their mutual fund family trustees. Families secure substantial inflows by being named the trustee of a 401(k) plan. We find that family trustees significantly overweight their 401(k) client firm's stock. Trustee overweighting is more pronounced when the relationship is more valuable to the trustee family, and it is concentrated in those funds that receive the greatest benefit from the inflows. When other mutual funds are selling the client firm's stock, the trustee does the opposite and significantly increases its holdings of the client. This overweighting is not explained by superior information. We also quantify the flow benefit to the trustee mutual funds of being included in the client firm's 401(k) plan and find that this inclusion has an economically and statistically large, positive effect on inflows.

    Keywords: Value; Information; Investment Funds; Stocks; Relationships; Financial Services Industry;


    Cohen, Lauren, and Breno Schmidt. "Attracting Flows by Attracting Big Clients." Journal of Finance 64, no. 5 (October 2009): 1225–1252. (Winner of the Barclays Global Investors Best Paper Prize, Asset Allocation Symposium, European Finance Association 2006. Winner of the Society of Quantitative Analysts Award, Best Paper in Quantitative Investments, Western Finance Association 2007.) View Details
  10. Loyalty Based Portfolio Choice

    Lauren Cohen

    I evaluate the effect of loyalty on individuals' portfolio choice using a unique dataset of retirement contributions. I exploit the statutory difference that in 401(k) plans stand alone employees can invest directly in their division, while conglomerate employees must invest in the entire firm, including all unrelated divisions. Consistent with loyalty, employees of stand alone firms invest 10 percentage points (75%) more in company stock than conglomerate employees. Support is also found using variation in loyalty between different groups of employees, both across and within firms. The cost to employees of loyalty is large, and can amount to nearly a 20 percent loss in retirement income.

    Keywords: Investment; Retirement; Decisions; Employees; Performance Evaluation; Business Conglomerates; Compensation and Benefits;


    Cohen, Lauren. "Loyalty Based Portfolio Choice." Review of Financial Studies 22, no. 3 (March 2009): 1213–1245. View Details
  11. The Small World of Investing: Board Connections and Mutual Fund Returns

    Lauren Cohen, Andrea Frazzini and Christopher J. Malloy

    This paper uses social networks to identify information transfer in security markets. We focus on connections between mutual fund managers and corporate board members via shared education networks. We find that portfolio managers place larger bets on firms they are connected to through their network, and perform significantly better on these holdings relative to their non-connected holdings. A replicating portfolio of connected stocks outperforms a replicating portfolio of non-connected stocks by up to 7.8% per year. Returns are concentrated around corporate news announcements, consistent with mutual fund managers gaining an informational advantage through the education networks. Our results suggest that social networks may be an important mechanism for information flow into asset prices.

    Keywords: Financial Markets; Information Management; Social and Collaborative Networks; Announcements; Investment Portfolio; Investment Return; Investment Funds; Asset Pricing; Governing and Advisory Boards;


    Cohen, Lauren, Andrea Frazzini, and Christopher J. Malloy. "The Small World of Investing: Board Connections and Mutual Fund Returns." Journal of Political Economy 116, no. 5 (October 2008): 951–979. (Winner of the Barclays Global Investors Award, Best Paper in Asset Pricing, European Finance Association 2007.) View Details
  12. Economic Links and Predictable Returns

    Lauren Cohen and Andrea Frazzini

    This paper finds evidence of return predictability across economically linked firms. We test the hypothesis that in the presence of investors subject to attention constraints, stock prices do not promptly incorporate news about economically related firms, generating this return predictability across assets. We use a dataset of firms' principal customers to identify a set of economically related firms, and show that stock prices do not incorporate news involving related firms, generating predictable subsequent price moves. A long/short equity strategy based on this effect yields monthly alphas of over 150 basis points, or over 18 percent per year.

    Keywords: Economics; Price; Assets; Data and Data Sets; Customers; Stocks; Equity; Strategy; Investment Return; Forecasting and Prediction;


    Cohen, Lauren, and Andrea Frazzini. "Economic Links and Predictable Returns." Journal of Finance 63, no. 4 (August 2008). (Winner of Smith Breeden Prize for the Best Paper Published in the Journal of Finance in Asset Pricing (Distinguished Paper) 2008. Winner of Chicago Quantitative Alliance Academic Paper Competition. First Prize presented by Chicago Quantitative Alliance. Winner of BSI Gamma Foundation Research Grant presented by BSI Gamma Foundation​.) View Details
  13. Supply and Demand Shifts in the Shorting Market

    Lauren Cohen, Karl B. Diether and Christopher J. Malloy

    Using proprietary data on stock loan fees and quantities from a large institutional investor, we examine the link between the shorting market and stock prices. Employing a unique identification strategy, we isolate shifts in the supply and demand for shorting. We find that shorting demand is an important predictor of future stock returns: An increase in shorting demand leads to negative abnormal returns of 2.98% in the following month. Second, we show that our results are stronger in environments with less public information flow, suggesting that the shorting market is an important mechanism for private information revelation.

    Keywords: Data and Data Sets; Stocks; Financing and Loans; Price; Strategy; Demand and Consumers; Forecasting and Prediction; Investment Return; Markets; Information;


    Cohen, Lauren, Karl B. Diether, and Christopher J. Malloy. "Supply and Demand Shifts in the Shorting Market." Journal of Finance 62, no. 5 (October 2007): 2061–2096. (Winner of Smith Breeden Prize for the Best Paper Published in the Journal of Finance in Asset Pricing (Distinguished Paper) 2007.) View Details

Working Papers

  1. Patent Trolls: Evidence from Targeted Firms

    Lauren Cohen, Umit G. Gurun and Scott Duke Kominers

    We provide theoretical and empirical evidence on the evolution and impact of non-practicing entities (NPEs) in the intellectual property space. Heterogeneity in innovation, given a cost of commercialization, results in NPEs that choose to act as "patent trolls" that chase operating firms' innovations even if those innovations are not clearly infringing on the NPEs' patents. We support these predictions using a novel, large dataset of patents targeted by NPEs. We show that NPEs on average target firms that are flush with cash (or have just had large positive cash shocks). Furthermore, NPEs target firm profits arising from exogenous cash shocks unrelated to the allegedly infringing patents. We next show that NPEs target firms irrespective of the closeness of those firms' patents to the NPEs', and that NPEs typically target firms that are busy with other (non-IP related) lawsuits or are likely to settle. Lastly, we show that NPE litigation has a negative real impact on the future innovative activity of targeted firms.

    Keywords: Patent trolls; NPEs; innovation; patents; Patents; Ethics; Lawsuits and Litigation; Innovation and Invention; Corporate Finance;


    Cohen, Lauren, Umit G. Gurun, and Scott Duke Kominers. "Patent Trolls: Evidence from Targeted Firms." Harvard Business School Working Paper, No. 15-002, July 2014. (Revised August 2014.) View Details
  2. Mini West Virginias: Corporations as Government Dependents

    Lauren Cohen and Christopher J. Malloy

    Much like states that rely on government spending, certain firms rely on the government for a substantial share of their revenues. Exploiting the statutory requirement that forces firms to list the identities of their major customers, we identify and examine the set of firms whose major customers are listed as government entities. We employ an identification strategy that exploits government contract bid protests in order to identify the causal impact of government sales on future firm outcomes, and find that government-linked firms invest less in physical and intellectual capital, and have lower future sales growth.

    Keywords: government spending; R&D; investment; customers; Customers; Corporate Disclosure; Spending; Investment; Research and Development; Government and Politics; Business and Government Relations;


    Cohen, Lauren, and Christopher J. Malloy. "Mini West Virginias: Corporations as Government Dependents." Working Paper, March 2014. View Details
  3. Playing Favorites: How Firms Prevent the Revelation of Bad News

    Lauren Cohen, Dong Lou and Christopher J. Malloy

    We explore a subtle but important mechanism through which firms manipulate their information environments. We show that firms control information flow to the market through their specific organization and choreographing of earnings conference calls. Firms that "cast" their conference calls by disproportionately calling on bullish analysts tend to underperform in the future. Firms that call on more favorable analysts experience more negative future earnings surprises and more future earnings restatements. A long-short portfolio that exploits this differential firm behavior earns abnormal returns of up to 101 basis points per month. Further, firms that cast their calls have higher accruals leading up to call, barely exceed/meet earnings forecasts on the call that they cast, and in the quarter directly following their casting tend to issue equity and have significantly more insider selling.

    Keywords: Information; Strategy; Ethics;


    Cohen, Lauren, Dong Lou, and Christopher J. Malloy. "Playing Favorites: How Firms Prevent the Revelation of Bad News." Working Paper, August 2014. (Winner of 2014 Crowell Memorial Prize For the best paper on quantitative investing, PanAgora Asset Management, Inc. 2014.) View Details
  4. Industry Window Dressing

    Huaizhi Chen, Lauren Cohen and Dong Lou

    We explore a new mechanism through which investors take correlated shortcuts. Specifically, we exploit a regulatory provision governing firm classification into industries: A firm's industry classification is determined by the segment that has the majority of sales. We find strong evidence that investors overly rely on this primary industry classification. Firms just above the industry classification cutoff have significantly higher betas with respect to, as well as more sector mutual fund holdings and analyst coverage from, that industry, compared to nearly identical firms just below the cutoff. We then show that managers undertake specific actions to exploit investor shortcuts. Firms around the discontinuity point of 50% sales are significantly more likely to have just over 50% of sales from a "favorable" industry. Further, these firms just over the cutoff have significantly lower profit margins and inventory growth compared to other firms in the same industries, consistent with these firms slashing prices to increase sales. These same firms, however, do not exhibit different behaviors in any other aspect of their business (e.g., CapEx or R&D), suggesting that it is not a firm-wide shift of focus. Last, firms garner tangible benefits from switching into favorable industries, such as engaging in significantly more SEOs and stock-financed M&As.

    Keywords: investor shortcuts; industry classification; opportunistic managerial behavior; discontinuity; Behavior; Investment;


    Chen, Huaizhi, Lauren Cohen, and Dong Lou. "Industry Window Dressing." Working Paper, July 2014. View Details
  5. Resident Networks and Firm Trade

    Lauren Cohen, Umit G. Gurun and Christopher J. Malloy

    We demonstrate that simply by using the ethnic makeup surrounding a firm's location, we can predict, on average, which trade links are valuable for firms. Using customs and port authority data on the international shipments of all U.S. publicly-traded firms, we show that firms are significantly more likely to trade with countries that have a strong resident population near their firm headquarters. We use the formation of World War II Japanese Internment Camps to isolate exogenous shocks to local ethnic populations, and identify a causal link between local networks and firm trade links. Firms that exploit their local networks (strategic traders) see significant increases in future sales growth and profitability, and outperform other importers and exporters by 5%-7% per year in risk-adjusted stock returns. In sum, our results document a surprisingly large impact of immigrants' economic role as conduits of information for firms in their new countries.

    Keywords: Information networks; trade links; firm behavior; Information; Networks; Ethnicity Characteristics; Residency Characteristics; Business Headquarters; Trade; Social and Collaborative Networks;


    Cohen, Lauren, Umit G. Gurun, and Christopher J. Malloy. "Resident Networks and Firm Trade." Working Paper, October 2014. View Details

Cases and Teaching Materials

  1. Innovating into Active ETFs: Factor Funds Capital Management LLC

    Kenneth A. Froot, Lauren Cohen and Scott Waggoner

    Kishore Karunakaran, President and COO of FFCM, faces a variety of challenges in launching an innovative investment management business in the rapidly evolving ETF space.

    Keywords: investment management; institutional investments; entrepreneurial finance; Financial Management; Innovation Strategy; Corporate Entrepreneurship; Capital Markets; Investment Funds; Financial Strategy; Management Teams; Financial Services Industry; Boston;


    Froot, Kenneth A., Lauren Cohen, and Scott Waggoner. "Innovating into Active ETFs: Factor Funds Capital Management LLC." Harvard Business School Case 211-031, November 2010. (Revised May 2012.) View Details
  2. Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market (TN)

    Lauren Cohen, Christopher Malloy and Timothy Gray

    Keywords: Retirement; Investment Funds; Financial Services Industry;


    Cohen, Lauren, Christopher Malloy, and Timothy Gray. "Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market (TN)." Harvard Business School Teaching Note 212-069, January 2012. (Revised February 2013.) View Details
  3. AQR's DELTA Strategy

    Daniel Bergstresser, Lauren Cohen, Randolph Cohen and Christopher Malloy

    In the summer of 2008, AQR Capital Management was considering the launch of a new hedge fund strategy. The proposed DELTA portfolio would offer investors exposure to a basket of nine major hedge fund strategies. The DELTA strategy would be innovative in two ways. First, in terms of its structure, AQR would implement these underlying strategies using a well-defined investment process, with the goal being to deliver exposure to a well-diversified portfolio of hedge fund strategies. Second, it terms of its fees, the new DELTA strategy would charge investors relatively lower fees: 1% management fees plus 10% of performance over a cash hurdle (or, alternatively, a management fee of 2% only). This fee structure was low relative to the industry, where 2% management fees plus 20% of performance, often with no hurdle, was standard.

    Keywords: Investment Portfolio; Investment Funds; Financial Strategy; Financial Services Industry;


    Bergstresser, Daniel, Lauren Cohen, Randolph Cohen, and Christopher Malloy. "AQR's DELTA Strategy." Harvard Business School Case 212-038, October 2011. (Revised March 2012.) View Details
  4. Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market

    Lauren Cohen and Christopher Malloy

    This case examines Dimensional Fund Advisors (DFA)'s decision to enter the retirement market with their new "Dimensional Managed DC" product, a complete retirement solution that aimed to provide investors with what they really wanted: the same standard of living in retirement that they had while working. The case considers the challenges of entering the fiercely competitive retirement market, introduces students to the large literature on the behavioral biases of individual investors, and asks students to evaluate an innovative new financial product designed to automate the process of retirement investing.

    Keywords: Retirement; Asset Management;


    Cohen, Lauren, and Christopher Malloy. "Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market." Harvard Business School Case 212-068, January 2012. (Revised March 2012.) View Details
  5. AQR's Momentum Funds (A)

    Daniel Baird Bergstresser, Lauren H. Cohen, Randolph Cohen and Christopher J. Malloy

    AQR is a hedge fund based in Greenwich, Connecticut, that is considering offering a wholly new line of product to retail investors, namely the ability to invest in the price phenomenon known as momentum. There is a large body of empirical evidence supporting momentum across many different asset classes and countries. However, up until this point, momentum was a strategy employed nearly exclusively by hedge funds, and thus not an available investment strategy to most individual investors. This case highlights the difficulties in implementing this “mutual fund-itizing” of a hedge fund product, along with the challenges that the open-end and regulatory features that a mutual fund poses to many successful strategies implemented in other contexts. In addition, it gives students the ability to calculate and interpret various horizons of correlations between many popular investment strategies using long time-series data and then thinking about the potential complementarities of strategies from a portfolio construction context.

    Keywords: Financial Strategy; Investment Funds; Investment Portfolio; Governing Rules, Regulations, and Reforms; Product Development; Financial Services Industry; Greenwich;


    Bergstresser, Daniel Baird, Lauren H. Cohen, Randolph Cohen, and Christopher J. Malloy. "AQR's Momentum Funds (A)." Harvard Business School Case 211-025, September 2010. (Revised March 2012.) View Details
  6. Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures (TN)

    Lauren Cohen, Christopher Malloy and Timothy Gray

    Keywords: Corporate Disclosure;


    Cohen, Lauren, Christopher Malloy, and Timothy Gray. "Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures (TN)." Harvard Business School Teaching Note 212-066, January 2012. (Revised March 2012.) View Details
  7. Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures

    Lauren Cohen and Christopher Malloy

    Keywords: Corporate Disclosure; Information;


    Cohen, Lauren, and Christopher Malloy. "Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures." Harvard Business School Case 212-031, October 2011. (Revised March 2012.) View Details
  8. AQR's Momentum Funds (B)

    Daniel Baird Bergstresser, Lauren H. Cohen, Randolph Cohen and Christopher J. Malloy

    This is a (B) case for AQR's Momentum Funds. It follows the first year of performance of the funds after launching, and gives students a critical inflection point for analyzing the nascent stages of a new product launch and the potential path dependence of the product depending on initial returns. It allows students to wrestle with the way forward given these conditions, and how (if at all) it changes their views, pitch, and perspective on the strategy, and traditional long-short strategies more generally.

    Keywords: Change; Decision Choices and Conditions; Investment Funds; Product Launch; Product; Performance; Perspective; Strategy;


    Bergstresser, Daniel Baird, Lauren H. Cohen, Randolph Cohen, and Christopher J. Malloy. "AQR's Momentum Funds (B)." Harvard Business School Supplement 211-075, April 2011. (Revised May 2011.) View Details
  9. Miracle Life, Inc.

    Lauren H. Cohen and Christopher J. Malloy

    Miracle Life is a firm with a unique setup and organizational structure. Specifically, it is a network marketing firm, also known as multi-level marketing (MLM) firm, which utilizes a large distributor base and depends on this individual distributor base to sell its products, giving explicit incentives for these individual distributors to both sell its products and sign up other distributors. The case gives students the opportunity to take the basic framework of Discounted Cash Flow (DCF) Analysis and apply it to two unique perspectives of an identical problem. The students will then use this DCF approach to rationalize observed stock prices, connecting the two, and further reconcile how a company's future plan for growth, and the plausibility of this plan, has implications jointly for DCF and stock prices.

    Keywords: Finance; Cash Flow; Stocks; Growth and Development Strategy; Product Marketing; Distribution; Organizational Structure;


    Cohen, Lauren H., and Christopher J. Malloy. "Miracle Life, Inc." Harvard Business School Case 210-039, November 2009. (Revised November 2010.) View Details
  10. PlanetTran

    Lauren H. Cohen and Christopher J. Malloy

    PlanetTran is an environmentally-friendly car service that utilizes a fleet of hybrid cars in providing livery service to corporations and individuals. The founder, Seth Riney, is evaluating outside funding options in order to expand the company, and has met several local venture capital (VC) firms, Riney must decide if the dilution he would have to undergo in order to accept a substantial capital investment was worth the added upside to the company that both he and the VCs envisioned.

    Keywords: Business Growth and Maturation; Venture Capital; Investment; Management Analysis, Tools, and Techniques; Expansion; Value;


    Cohen, Lauren H., and Christopher J. Malloy. "PlanetTran." Harvard Business School Case 209-029, October 2008. (Revised March 2010.) View Details
  11. Tottenham Hotspur plc

    Lauren H. Cohen, Joshua D. Coval and Christopher J. Malloy

    Tottenham Hotspur Football Club is a publicly-owned professional soccer team based in London, England. The club's chairman, Daniel Levy, is contemplating a significant investment in physical assets, including the development of a new stadium as well as the acquisition of a new player. The team must decide if the expected cash flows associated with adding the stadium, the player, or both, warrant the considerable required investments in these assets.

    Keywords: Valuation; Capital Budgeting; Decisions; Competency and Skills; Cash Flow; Investment; Assets; Buildings and Facilities; Sports; Sports Industry; London;


    Cohen, Lauren H., Joshua D. Coval, and Christopher J. Malloy. "Tottenham Hotspur plc." Harvard Business School Case 209-059, November 2008. (Revised August 2012.) View Details