Forecasting stock returns an examination of stock market trading in the presence of transaction costs

The paper presents new evidence on the predictability of excess returns on common stocks for the Standard and Poor's 500 and the Dow Jones Industrial portfolios at the monthly, quarterly, and annual frequencies. It shows that recursive predictions obtained on the basis of the excess returns regressions are capable of correctly predicting a statistically significant proportion of the signs of the actual returns. The paper also shows that the switching portfolios constructed on the basis of the signs of the recursive predictions mean-variance dominate the respective market portfolios when trading takes place on a quarterly or annual basis. This result holds even under a high transaction cost scenario. However, due to the larger number of transactions at the monthly frequency the monthly switching portfolios only mean-variance dominate the respective market portfolios when transaction costs are zero or low.     

Mosaic overgrowth with fibroadipose hyperplasia is caused by somatic activating mutations in PIK3CA

The phosphatidylinositol 3-kinase (PI3K)-AKT signaling pathway is critical for cellular growth and metabolism. Correspondingly, loss of function of PTEN, a negative regulator of PI3K, or activating mutations in AKT1, AKT2 or AKT3 have been found in distinct disorders featuring overgrowth or hypoglycemia. We performed exome sequencing of DNA from unaffected and affected cells from an individual with an unclassified syndrome of congenital progressive segmental overgrowth of fibrous and adipose tissue and bone and identified the cancer-associated mutation encoding p.His1047Leu in PIK3CA, the gene that encodes the p110α catalytic subunit of PI3K, only in affected cells. Sequencing of PIK3CA in ten additional individuals with overlapping syndromes identified either the p.His1047Leu alteration or a second cancer-associated alteration, p.His1047Arg, in nine cases. Affected dermal fibroblasts showed enhanced basal and epidermal growth factor (EGF)-stimulated phosphatidylinositol 3,4,5-trisphosphate (PIP(3)) generation and concomitant activation of downstream signaling relative to their unaffected counterparts. Our findings characterize a distinct overgrowth syndrome, biochemically demonstrate activation of PI3K signaling and thereby identify a rational therapeutic target.     

Mutations in voltage-gated potassium channel KCNC3 cause degenerative and developmental central nervous system phenotypes

Potassium channel mutations have been described in episodic neurological diseases. We report that K+ channel mutations cause disease phenotypes with neurodevelopmental and neurodegenerative features. In a Filipino adult-onset ataxia pedigree, the causative gene maps to 19q13, overlapping the SCA13 disease locus described in a French pedigree with childhood-onset ataxia and cognitive delay. This region contains KCNC3 (also known as Kv3.3), encoding a voltage-gated Shaw channel with enriched cerebellar expression. Sequencing revealed two missense mutations, both of which alter KCNC3 function in Xenopus laevis expression systems. KCNC3(R420H), located in the voltage-sensing domain, had no channel activity when expressed alone and had a dominant-negative effect when co-expressed with the wild-type channel. KCNC3(F448L) shifted the activation curve in the negative direction and slowed channel closing. Thus, KCNC3(R420H) and KCNC3(F448L) are expected to change the output characteristics of fast-spiking cerebellar neurons, in which KCNC channels confer capacity for high-frequency firing. Our results establish a role for KCNC3 in phenotypes ranging from developmental disorders to adult-onset neurodegeneration and suggest voltage-gated K+ channels as candidates for additional neurodegenerative diseases.     

Common variants in WFS1 confer risk of type 2 diabetes

We studied genes involved in pancreatic beta cell function and survival, identifying associations between SNPs in WFS1 and diabetes risk in UK populations that we replicated in an Ashkenazi population and in additional UK studies. In a pooled analysis comprising 9,533 cases and 11,389 controls, SNPs in WFS1 were strongly associated with diabetes risk. Rare mutations in WFS1 cause Wolfram syndrome; using a gene-centric approach, we show that variation in WFS1 also predisposes to common type 2 diabetes.     

Kras regulatory elements and exon 4A determine mutation specificity in lung cancer

Kras is the most frequently mutated ras family member in lung carcinomas, whereas Hras mutations are common in tumors from stratified epithelia such as the skin. Using a Hras knock-in mouse model, we demonstrate that specificity for Kras mutations in lung and Hras mutations in skin tumors is determined by local regulatory elements in the target ras genes. Although the Kras 4A isoform is dispensable for mouse development, it is the most important isoform for lung carcinogenesis in vivo and for the inhibitory effect of wild-type (WT) Kras on the mutant allele. Kras 4A expression is detected in a subpopulation of normal lung epithelial cells, but at very low levels in lung tumors, suggesting that it may not be required for tumor progression. The two Kras isoforms undergo different post-translational modifications; therefore, these findings can have implications for the design of therapeutic strategies for inhibiting oncogenic Kras activity in human cancers.