February, 27 2008, at 4:45 p.m.
University Events Room
Glickman Family Library, 7th floor
Portland USM Campus
(map)
In 1881 the astronomer Simon Newcomb noticed that the front pages of logarithmic tables (which contain the low digits) were more worn and finger smudged than the latter part of the document with the higher numbers. He figured out why, but his discovery was dismissed as unimportant. In 1938 Frank Benford, a physicist at General Electric, independently made the same discovery and embarked on a crusade to explore its implications. Unfortunately, for Newcomb, this phenomenon now bears Benford’s name. Benford’s Law shows that the leading digit of many sets of natural numbers does not follow a uniform distribution. In fact, there is about a 48% chance that many descriptive numbers, including stock indexes, will begin with either a “1” or a “2”. There are numerous contemporary applications of this law, especially by auditors and tax authorities. This research applies the law to the extended Value Line database and finds evidence supporting the notion that firms split their stock to put the share price in an attractive price range.
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Bob is University Foundation Professor of Investment Education and Professor of Finance at the University of Maine. The University of Maine General Alumni Association named him the 2005 Distinguished Maine Graduate.
His Bachelor of Science degree in engineering is from the United States Military Academy at West Point, his Master of Science degree in business administration from Boston University, and his Ph.D. in finance from Penn State. He has also been a visiting professor of finance at Maine Maritime Academy and at Harvard University where he was Deputy Director of the Summer Economics Program from 1997 – 1999. He is a Chartered Financial Analyst.
Dr. Strong's consulting focuses on risk management and asset valuation. Among the organizations for which he has consulted are Eastern Maine Healthcare, Bangor Hydro Electric Company, Maine Public Service Company, Energy Atlantic, the Maine State Police, the Maine Forest Service, Heritage Bank of Schaumberg, and Texas Instruments. He is frequently an expert witness and has been a conference speaker for the Chicago Board Options Exchange, the Chicago Board of Trade, and the American Stock Exchange.
His current research interests center on investor asset allocation. He has published in journals ranging from the Journal of Finance and the Journal of Portfolio Management to the trade journals Pensions and Investments and Futures. His third book Derivatives: An Introduction was published in 2002.
Dr. Strong is past president of the Northeast Business and Economics Association, the Bangor Rotary Club, and the Maine Security Analysts Society. He is also on the Board of Directors of Bangor Savings Bank, Bangor Savings Bank Foundation, Eastern Maine Charities, the James W. Sewall Company, the Maine Conference of the United Church of Christ, and is Chairman of the Board of Bangor Securities, Inc, a full-service retail brokerage firm. Bob is an honorary captain in the Maine State Police.
The colloquium is sponsored by the L.L. Bean/Lee Surace Endowed Chair in Accounting.
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USM Professor Jeffrey Gramlich was appointed the first L.L. Bean/Lee Surace Chair in Accounting in the USM School of Business in 2003. His appointment was made possible by a $1 million gift from L.L. Bean, Inc., its board chair, Leon Gorman, his wife Lisa, Jim and Maureen Gorman, and Tom Gorman, who established the chair in memory of L.L. Bean CFO Lee Surace '73, '81, who died in March of 2001. Surace was chair of the USM School of Business' Advisory Council and was a frequent guest lecturer.
The USM School of Business is accredited by the prestigious AACSB International. For students seeking the finest education and companies seeking the highest caliber talent, partnership, and educational opportunities, AACSB International accreditation is one of the most important affirmations of sustained quality in the word. For more information about School of Business programs, call 780-4020.
