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This is a modified version of the report for Understanding Finance (Part 2: Sources of finance) in Bath Full Time MBA Class of 2020.

Sources of finance

Summary

This report will address three issues, one of which is to identify and explain three factors that a Chief Financial Officer (CFO) have consider to determine an appropriate source of finance for a company, which are mainly how much to pay dividends from retained earnings and the level of gearing with debt and equity. Another problem is to explain why debt is usually a cheaper source of finance than equity is true owing to tax deductibility and lower cost. The last topic is to describe the two sources of funding (revolving credit facility and senior note), explaining how each source of funding works and outlining at least one advantage and one disadvantage of each source.

Appropriate source of finance

The sources of finance for a company are mainly retained earnings, equity and debt. When a Chief Financial Officer (CFO) considers a harmony of these sources, they should think how much they should return the retained earnings as the dividends for their shareholders primarily. This is mainly because Assets of investors should be allocated by the most productive way, therefore, usually the retained earnings, consequently dividends ought to be reinvested to other more the companies or projects except for some cases including Google with zero dividend policy owing to having a great deal of cash generating projects internally. However, even if the company has some projects with a positive NPV, it may not be covered by only their retained earnings. In this situation, CFO should consider how to finance at the lowest cost, especially interest to gear with equity and debt, which are external sources for the company. There are two theories to find an optimal capital structure, which are pecking order theory and trade off theory, however, both argued that debt is better or more preferable than equity.

The reason debt is usually a cheaper source of finance than equity

why debt is usually a cheaper source of finance than equity can be mainly two reasons. One of them is that the cost of debt is less than the cost of equity due to lower risk. Although the issuer has to pay the arrangement fee when they issue the debt, still the cost is cheaper than the one of equity because they must pay the dividend unless they have no dividend policy. Another reason might be that the debt interest is tax deductible which lowers cost to the company.

The sources of funding (revolving credit facility and senior note)

The company is funded by debt mainly including revolving credit facility and senior note. A revolving credit (facility) is a modified line of credit which is a one-time agreement due to the fact that the account is closed when the company spends the maximum amount previously determined (Segal, 2019). However, the difference between a revolving credit and normal one is that the company can pay on a revolving credit account regularly with slightly higher interest rate which can be the one of major disadvantages. On the other hand, one of the major advantages might be that the company has the capability to pay on demand, which is equal to having the liquidity to pay by cash even if the company has no cash. The senior note is a debt to have a right to be paid by the issuer primarily when they are bankrupt in comparison with the subordinate debt (Watson and Head, 2019). The primary claim on an issuer’s assets and tax-deductible can be the major advantages. In contrast, one of the disadvantages might be that the issuer has to be redeemed when it reaches maturity. In addition, according to the tradeoff theory, the debt increases financial risk because the interest has to be paid primary and therefore the dividend may not remain. As a result, a senior note which has a higher interest than the normal one can increase the risk of bankruptcy more than using ordinary debt.

Reference

Posted in Business, Finance, Start-Up and tagged Business Finance Start-Up

This is a modified version of the report for Knowledge Leadership in a Global Economy in Bath Full Time MBA Class of 2020.

Knowledge Leadership in a Global Economy

Introduction

Y Combinator (YC) can be one of the most popular venture capital (VC) in the world. One of the main reasons for popularity might be they ‘created a new model for funding early stage startups’ (Y Combinator, 2020). This is because for only 15 years since 2005, they have supported more than 2,000 firms including Airbnb, Dropbox and Heroku, which are valued beyond 100 billion dollars (ibid). They also have Startup School which is a free 8-week online course for building startups. In addition, Hacker News which is one of the most famous social news sites in the world. Therefore, they might have a total ecosystem about startups which is not only for investors such as themselves but also for the people who are going to become founders. In addition, VC can be one of the most apparent knowledge intensive industries and YC is one of the biggest winners of the VC industry, especially early stage startups fund raising. This essay will appraise the effectiveness of this firm’s current knowledge management practices and acknowledge what requires to be done to enhance both formal and informal knowledge management practices in terms of six aspects in relation to YC. These aspects are earned to address the definition of knowledge currently used in YC, whether this definition reflects the complexity of knowledge in YC, whether the core knowledge management enablers are in YC, what are the core knowledge assets in YC, The current knowledge management practices and what can be done to effectively match knowledge assets and knowledge management practices? respectively.

The definition of knowledge currently used in the organization

YC provides the program for the company, mainly startup founders who want to present and get feedback on their ideas or business plans for the investors and YC alumni (Moed, 2019). The knowledge which YC share with the founders experienced this program is mainly instruction how to create a startup effectively and how to avoid the danger of starting up (ibid). One of the most popular example of startup knowledge can be the statement that the founders should not scale or raise the money by the funds before they found Product Market Fit (PMF) because if they did not find PMF, although they burn a huge amount of cash, the revenue would not increase owing to the fact that the customers just do not want to buy their product and therefore whether the product which the founders built seems to be PMF or not can be the most significant factor as for the VC including YC themselves (Seibel, 2016). However, VCs even the greatest one are always losing the opportunity to invest the prospective startups which other VC recommended to invest together mainly because the investor in the VC had to convince other partners in their firms and this might be extremely time consuming and difficult task owing to the fact that no one can see the future but they must predict what the firm will become (Graham, 2011). PMF is vitally important to decide whether the VCs invest in the startups or not. This is primary because according to CB Insights, 42% of startups failed due to the fact that they built the product which the customers do not need (Griffin, 2017). Despite the importance, there are several definitions of PMF. The space to interpret the PMF might create the complexity and difficulty to manage the startups. However, survey.io provides the startups one of the most widespread PMF survey tools named and developed by Sean Ellis (Shah, 2020). The survey asks the customers the question which is ‘How would you feel if you could no longer use their product?’ with choices which are ‘Very disappointed’, ‘Somewhat disappointed’ or ‘Not disappointed (It really isn’t that useful)’ and as a result of this survey, According to Sean Ellis, if at least 40% of people who are surveyed selected ‘Very disappointed’, the product would reach PMF (ibid). Slack earned 51% respondents who opted ‘Very disappointed’ if it no longer existed and therefore it is already being utilized by more than 750,000 people per day (ibid). This case is one of the most apparent examples of the product which reached PMF. As for the most VCs especially in the United States, PMF is the fundamental condition to invest and therefore they want to know whether the startup’s service truly reaches PMF or not, however, this knowledge which YC and other VCs address still exists ambiguously. From a contemporary view, the knowledge characterized several aspects such as being partial (which means no one can write fully all of ideas people have), tacit (the gap between the idea and the ability to write it), subjective, and context dependent (Hislop et al, 2018). Hence, PMF can be a typical case of modern characteristic knowledge as for the investors and founders.

Whether this definition reflects the complexity of knowledge in the organization

It is clearly positively affected on strengthening YC’s competitive advantages compared with other VCs. This can be because they are expanding their community members as YC alumni and becoming the authority to give the startup the credit for the future scaling mainly due to the fact that they could find Airbnb and Dropbox which are one of the most valuable firms in the world before they succeeded and therefore it can be easily imagine if a startup rose money by YC, the firm would be believed as a next Airbnb by the investors and consumers. From the viewpoint of the learning organization (LO) which is defined as ‘organization which facilitates the learning of all its members and consciously transforms itself and its context’ , YC can be also the example of LO, however, they not only facilitate the stuff in the firm but also the member of their community outside of the company (Hislop et al, 2018).

Whether the core knowledge management enablers are in place

Paul Graham who is the cofounder of YC and the author of some popular books in the software engineering industry could be the core knowledge management enablers. His blog can be the one of the most famous and authorized. In addition, the blog mainly is written about IT and Startups. Among his posts in blog, the article named ‘Subject: Airbnb’ might be the most popular one, which is written about Fred Wilson, the famous investor, who was missing Airbnb and posted the actual emails about that (Graham, 2011). He tried to translate the tacit knowledge which only few successful investors knew about investment decision making into an explicit one to write the article and show real email conversation. Although still some knowledge which he could not write is there, this experiment can represent his and his VC’s character for knowledge management and its process. Another main source of the core knowledge management enablers also could be the startup founders who joined YC programs. The lecturers in the programs are mainly the co-founders and the partners of the firm, however, some of them are YC backed startup founders who used to be students in this program. The winners, who could raise money and other resources such as the knowledge about startup management, also become the lecturer or at least guest speaker in the program. Even if the students do not become such a person, they can communicate and teach each other in the social networking site which are provided by YC as a platform and they can meet other students who are struggling to run their own startup online using Skype, Google Hangout or other Online video communication tools in a certain period, for example, the typical program has 8 weeks and therefore usually they can communicate each other with the lecturer on week 2, 4, 6 and 8. Other major sources of the core knowledge management enablers could be the location and culture where YC is located, Silicon Valley in San Francisco of California. This is mainly because this place is one of the most intensively high tech companies and VC located in the area and therefore the founders can easily meet their customers and find their mentors who have already succeeded in the similar business to learn how to do what they truly want to do (Migicovsky, 2019). In addition, Silicon Valley can be characterized mainly by 2 features, which are respecting ‘wild’ ideas and paying forward (Jordan, 2017). Only in this area, the ideas which people living in the outside of this cultural context may insult are accepted and encouraged owing to the fact that the people in Silicon Valley understand scoffing at someone’s too ambitious idea can lose the great deal of chance to invest in future scaling firms (ibid). One of the most popular example is that if a person wanted to build electric car company while he did not know not only about car but also battery, he would not be assisted by the VC and engineers, however, he was helped and financed a huge amount of money and other resources because he lived in Silicon Valley and therefore Tesla became one of the largest market capitalization automobile firm in the United States, beyond Ford (ibid). Paying forward culture can be also less likely to be settled in other areas. This means if a founder was helped by other founders or VCs, he would assist the person who is in a similar situation with him and therefore this connection will be strengthened to the future (ibid). These intellectual assets might not be seen in other areas even in other states in the United States. Hence, this location advantages can be the most valuable the core knowledge management enabler for YC and their customers because if they live in other area, YC can inform them the latest knowledge created in Silicon Valley and this type of knowledge might be what the founders especially the one who are not live in Silicon Valley actually desire to learn. YC did summarize this Silicon Valley culture and became their own assets and culture.

What are the core knowledge assets in the organization?

The connection between YC alumni and investors including YC themselves might be fundamental intellectual capital built by mostly explicit knowledge about startups such as how they reach PMF. They have their own online startup school which constructs the video lectures by YC partners, the direct communication system which if the founders want to ask them, they can do so anytime and organize articles about several specific stages which the founders would be in therefore they can be supported by them everywhere and every time. As a result of that, YC can collect the data regarding startups especially at an early stage, which means the founders try to raise money for the first time. More data they earn, the accuracy of the future success prediction or the odds could increase and therefore they will be able to obtain further data and positive feedback loop. Another major core knowledge asset might be their online startup resources named library. The library provides students and people who are interested in the program the documents, tools, template agreements, media and articles. Almost all events YC held are recorded and shared for the online users. It is clearly seen their efforts to make the startup management knowledge enable their potential customers.

The current knowledge management practices

There is some vital asymmetry of information in Series A (early stage of startups financing) between the VCs and the founders, which brings them serious disadvantages, however, YC tried to dissolve this issue to share their knowledge created by their program (Harris and Tam, 2020). For example, as a result of their research, the founders spent a huge amount of time and money to yield a single term sheet (a basic condition to be invested by VCs) and they met totally 30 investors to do so on average (ibid). To avoid or reduce this time-consuming activity, YC has provided the guide to raising series A and a standard clean series A term sheet as a template (ibid). Therefore, YC did translate the informal knowledge which only few investors knew and took advantage of the founders into formal information which every founder can access. Hence, they are becoming the platform for the startups especially early stage one. Furthermore, YC is expanding their startup knowhow outside of the United States mainly Europe and China. This is primarily because especially in Europe, European ecosystem for startups has been built and European have the confidence in respect to that as a result of the fact that the capital access is improving (Voices, 2018). There are mainly 3 reasons to justify their confidence. First of all, in fact, in the region of European startups have become the global key players such as Spotify, Skype, DeepMind, Monzo and Soundcloud with talented engineer teams (ibid). Secondly, there are Computer Science hubs including Cambridge, Oxford, ETH Zurich and therefore most engineers graduated such universities select to join the scaling Europe born startups (ibid). Thirdly and finally, Silicon Valley or more generally the United States are matured mainly due to the dominance of Big Tech companies such as Amazon, Apple, Google, Facebook and running cost there is continuously increasing (ibid). Accordingly, these companies are seeking their engineers outside of the United States to build their branches in Europe and hence their investment is contributing to strengthen European engineer’s job market which means European IT firms become more easily hire talented engineers then ever (ibid). On the contrary, although YC built their branch in China in 2018 and they allow the branch full access to their key resources and independence in respect to the operations from the headquarters in Silicon Valley, suddenly they abandoned the Chinese branch (Liao, 2019). This might be because the most prospective Chinese startups have already been financed and ruled by Chinese large tech companies such as Alibaba, Tencent and Baidu and therefore multinational corporations in China have almost been wiped out. They almost never successfully land in China’ according to Lu Qi who managed the Chinese YC branch (ibid). This case could suggest that YC startup knowledge depends on western cultural context especially the American one and hence there is still some tacit knowledge referring to that. Lu Qi of YC China clearly failed in China, however, he is still thinking why he did so. He said that ‘When it comes to whether Chinese startups are suited for mentorship, or whether incubators bring value to China, these are separate questions’ which means he recognized the obstacle to succeed YC business in China but the issue was quite complicated and could not divide it into several aspects (ibid).

What can be done to effectively match knowledge assets and knowledge management practices?

YC has several type of knowledge assets mainly not only experiential knowledge assets (tacit knowledge shared through common experiences) which is matched their practice such as PMF but also systemic knowledge assets (systemized and packaged explicit knowledge) that is correlated their methods including manuals dealing with series A raising and databases according to how to build startups. However, there is still a gap between the knowledge regarding startups written in the assets such as the documents and what the students mainly the founders actuary learned from the one (PALIOS, 2019). In the programs, YC tried to space among them using face to face mentoring with the mentors for startups and alumni (ibid). All learnings YC observed are uploaded to their online startup school and therefore the students can study the knowledge in their hometown which they used not to be able to be assisted, though the effectiveness of both methods depends on the situation which the founders are in (ibid). When they are in the early stage before scaling their firms, the mentoring is relatively effective, however, if they are in the scaling stage, the mentoring will not be less feasible (ibid). YC holds events to meet their customers who can also see each other. In fact, YC launched the event to seek the person who is intelligent and gifted, like Elon Musks, especially the one who desire to employ hard tech with more inclusive way such as travel and lodging costs of participants, who appeal via a one-minute video that inquires them related to their interests, and what their potential for dignity is adjusted for whatever life situations they were born into (Konrad, 2019). The conferences can be also seen as the tool to fill the gap and therefore YC might employ each service complementally.

Conclusion

This essay has assessed the effectiveness of this firm’s current knowledge management practices and considered what requires to be done to enhance both formal and informal knowledge management practices in terms of six aspects in connection with YC, the world’s most popular venture capital. These aspects are earned to address the definition of knowledge currently used in YC, whether this definition reflects the complexity of knowledge in YC, whether the core knowledge management enablers are in YC, what are the core knowledge assets in YC, The current knowledge management practices and what can be done to effectively match knowledge assets and knowledge management practices? respectively. The knowledge is mainly startup incubation know how especially PMF. The complexity of that is due to the ambiguity of PMF. The core knowledge management enablers are the cofounders of YC such as Paul Graham, YC alumni including Airbnb founder and Silicon Valley culture equally paying forward and respect for too ambitious ideas. The core knowledge assets are their startup acceleration resources such as video, documents, template agreements, tools and the people who are equal to the core knowledge management enablers speaking in the event or video. The current knowledge management practices are sharing their startup resources via their startup schools, the latest of which is the guide about series A and expanding outside of the United States mainly Europe and China, however, their Chinese branch failed. To answer what can be done to effectively match knowledge assets and knowledge management practices is the balancing among the documents, mentoring and events, especially distributing the documents via their platforms can change the situation of the people who live in the place far from the United States. YC itself is scaling their service via their online startup school to the world. In Europe, it can be seen the success regarding their expansion. However, the failure in China noticed the fact that there is still a huge gap between hands-on practice in Silicon Valley and the one in non-western cultural contexts. In spite of that, if they overcame the gap, they would be able to scale their business into non-western countries such as African and Asia-Pacific nations. As a result, they might be able to find the next Elon Musks in such regions. Startup incubation can be the engine of economic growth to build the innovative product which might increase human wealth and therefore their business may assist to increase not only quality of human life but also their living standards.

Reference

Posted in Business, Finance and tagged Business Finance

This is a modified version of the report for Behavioural Finance in Bath Full Time MBA Class of 2020.

Behavioural Finance

Introduction

‘The Market Is Always Wrong’ argued George Soros (Kaufman, 2018). Active trading can be the prediction for the residential return of the certain financial instruments (actual return minus benchmark return such as the stock index if they trade the shares) and therefore the active traders build their portfolio based on their prediction to win the market (Grinold, Ronald and Khan, 1995). His success seems to be the most famous example. However, most passive traders argue that the active traders never win the market owing to the fact that the price in the stock market counts on almost all information hence is nearly equal to the intrinsic value and then there is no opportunity to beat passive trading such as the investment to S&P 500. This essay will evaluate the passive trader’s argument in terms of behavioral finance theories and evidence and therefore also argue that although the assumption of the passive trader’s opinion mainly due to their emotional bias, still it is held by the empirical fact that index funds outperform active ones in the long term.

Active trader’s view

Grinold (1989 cited in Ding, 2009) indicated that the residential return is measured by the information ratio (IR) having two factors which are the skill of the prediction (named the information coefficient, IC) and how many times traders employ their skill (called the breadth). The relationship of these indicators is formulated by Grinold as IR is equal to IC times the square root of breath (ibid). In addition, Grinold’s claim assumed the existence of the residential return for the long term. One of the major examples to support his assumption can be the success of the value investment such as the purchase the stocks evaluated the lower price in comparison with book value or earnings (Ackert and Deaves, 2010). Hence, the high skilled active trader might be able to earn the residential return. This measurement also implies that even if a trader has relatively low skill, there is an opportunity to beat the market to increase the breadth (ibid). However, if the assumption could hold, it would lead the contradiction to the argument of the passive traders. This is because their statement based on the efficient markets hypothesis (EMH) that the price in the market reflects all information even not publicly available including insider’s one as the form of EMH is strong (ibid). This means, for example, if the trader forecasted the prospectively of a firm, the price of the company would count on his prediction and therefore he would be able to buy or sell his securities at the price which he thought it would be underestimated or overestimated and then the chance to purchase or short the undervalued or overvalued shares would be dismissed immediately after that, which is called no arbitrage condition (ibid).

Validation of EMH by the trader’s emotion

One of the major foundations of EMH is this condition, however, the assumption has been disputed (ibid). This is primarily because of the low liquidity of the market, which means even if the traders want to short the low liquid stocks, he might not be able to do so owing to the fact that he may not be able to find the counterparty to do so or even if he find them, the high transaction cost may exploit his revenue for the trade (ibid). In addition, major traders in the hedge funds are denied short selling which might deteriorate mispricing the securities by speculators (Barberis and Thaler, 2003). Hence, the arrogation is less likely to hold due to these reasons. In addition, the experienced traders are likely to regulate their emotion in the decision making and then their performance might be better than junior traders, however, still they could be biased by their sentiments and therefore they might wrongly price the securities (Fenton-O’Creevy et al, 2012). There are some biases such as home bias (the tendency that the trader invests in the domestic market rather than unfamiliar foreign markets) which can lead to a less diversified portfolio and therefore their performance might be less than the unbiased one (Ackert and Deaves, 2010). However, the more important ones are self-attribution bias, hindsight bias and confirmation bias (ibid). This is because these biases might be contributed to the persistence of overconfidence which is that the traders incline to overestimate their skill (ibid). These biases is defined as that people tend to overestimate the contribution for the success while undervalue the one for the failure, that they incline to exaggerate the predictability of a certain event and that they are likely to discover the evidence consistent with their belief while ignore conflicted information respectively (ibid).

Trader’s sentiment as a source of market anomalies

For instance, the implication of self-attribution bias in the trading can be short-run momentum and long-term reversals, which mean when the traders receive new positive signal for a stock, they tend to overvalue the price of the stock more than the intrinsic value in the short term while underestimate the effect for the price in the long term (DANIEL, HIRSHLEIFER and SUBRAHMANYAM, 1998). This is empirically observed as short-run positive autocorrelations of the stock return and long-run negative ones, both of which can be consistent with and realize the anomalies in the market as a counter example against EMH (ibid). Other significant emotional factors affecting the performance can be strong desire to avoid missing out or the sentiment of regret. For instance, the traders are more likely to realize returns than losses and therefore, especially risk averters incline to earn lower performance due to the fact that they tend to hold their shares in quite a long time (Alsharman, Fairchild and Hinvest, 2016). In fact, according to the prospect theory and its empirical evidence, the utilities of gain and loss might not be symmetry (ibid). This means people tend to require more premium against potential loss. For instance, the researchers ask the subjects in the experiment what gain would they demand for the coin tosses having a fair odd of fifty-fifty where loss is $50 (ibid). Most subjects call for the loss $125 which is 2.5 times higher than the loss (ibid). This phenomenon is called loss aversion which also might lead to the anomalies. Although EMH assumes universal utility function with rational investors, the asymmetry between gains and losses is inconsistent with the assumption (Ackert and Deaves, 2010).

Empirical superiority of index funds

However, top 10 active funds could hardly outperform the most index funds including the worst one even if they omitted their management fees (Crane and Crotty, 2018). Especially after counting on the residential risk adjustments, the index funds tend to exceed active funds apparently in terms of their risk adjusted return (ibid). Therefore, the market, even high liquidity one has the anomalies due to biased traders, however, the ones might not lead to the existence of the residential return in the long term. At least, EMH requires the unpredictability of the anomalies (Ackert and Deaves, 2010). The superiority of index funds could be consistent with the requirement of the market efficiency, which means the traders may not be able to forecast the anomaly using data they collect. This can be because clouding out the affection of trader’s sentiment and therefore the traders are less likely to predict whether the anomalies occurred by the trader’s biases affect positively or negatively even if they can forecast when the ones appear.

Algorithmic trading as a competitor of the index funds

Most traders can be biased; however, active trading can implement without them using the computers which is called algorithmic trading (AT). Among of AT, especially high-frequency trading (HFT) can be one of the most prospective active trading strategies. This is because some researchers indicated that the average HFT companies outperformed the index funds in terms of their risk adjusted residential returns in the E-mini S&P 500 futures market which is one of the highest liquidity and the most efficient market in the world (Baron, Brogaard and Kirilenko, 2014). This may mean that a great deal of breath (transaction) is likely to lead higher performance even if they have relatively low skill (the ability of prediction). It seems to be a counterexample for the superiority of index funds. However, this transaction speed race apparently will be won and dominated by only few firms which can invest a huge money into the machine that can detect and correspond to the earning chance at first (ibid). Therefore, the cost to build the system may overcome their residential return as a result of the competition. In addition, the US futures markets such as NYSE and CBOE have already imposed the speed limitation for the trading to set off the speed advantage, for example, the slower traders have an opportunity to cancel their transaction before the faster ones execute the deal (Henderson, 2019). Hence, the chance to earn residential return of HTF firms might be dismissed in the long term. Furthermore, some researchers indicated that the active funds using comprehensively AT are likely to earn lower holding profits and higher interim trading returns than in terms of the risk adjusted residential return, however, they seem to earn lower total one than the active funds with lower intensively AT (Fong, Parwada and Yang, 2018). This may mean that the transaction cost setoff the interim trading and hence AT do not lead to the higher return than non-AT active funds (ibid). This can be because AT incline to increase the number of transactions more than lower intensive AT funds. Therefore, it can be also concluded that although AT can eliminate the bias of the traders, it may not be able to earn higher profits than index funds because they tend to do so than the most active funds.

Conclusion

This essay has discussed the statement of the passive trader which is that no one can beat the market (index funds) in terms of behavioral finance theories and evidences such as the validation of EMH by the trader’s sentiment, the one’s sentiment as a source of market anomalies, the empirical superiority of index funds and AT as a competitor of the index funds. As a result of considerations, it is claimed that even if the emotion of the investors builds the anomalies, it may not be predictable and short lived. Only few exceptions can be HFT, however, it has been restricted by the regulators and suffered from the increase in IT development costs hence, it may no longer earn the residential return in the long term. More generally, AT funds could earn lower return than other active funds which could do so than the index funds. Therefore, elimination of the emotion may not contribute the greater performance than not only the one by emotional active fund managers but also the passive funds. Thus, it is concluded in this essay that the passive funds tend to have the higher performance than active funds even if the passive traders’ assumptions of EMH do not hold mainly because of the sentiment of the traders.

Reference

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