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Charles M. C. Lee

Charles M. C. Lee
Professor, Accounting
CharlesM. C.Lee
Joseph McDonald Professor of Accounting
Academic Area: 
Accounting

Research Statement

Broadly speaking, I am interested in the effect of human cognitive constraints on market participants and other factors that impact the way information is incorporated into prices. My publications have been in the areas of behavioral finance, financial statement analysis, equity valuation, quantitative investing, market microstructure, and security market regulation.

Research Interests

  • Financial statement analysis
  • Behavioral finance
  • Quantitative investment strategies
  • Equity valuation
  • Security market regulation
  • Market microstructure

Teaching Statement

Lee's teaching interests are closely aligned with his research interests and investment experience. He has taught both PhD and Masters students at the GSB. Alphanomics, his Masters-level Elective, is focused on active investing in public equity markets. It is a hands-on course that makes extensive use of analytical tools provided by the school's Real-time Analysis and Investment Lab (R.A.I.L.). Lee's teaching honors include nine annual School-Wide Teaching Excellence Awards for MBA, MSx, and PhD Education (at Michigan, Cornell, and Stanford). He has also delivered seven of the "Effective Teaching" lectures at the annual AAA New Faculty Consortium.

Bio

Charles M. C. Lee is the Joseph McDonald Professor of Accounting at the Graduate School of Business (GSB), Stanford University. He is also a Senior Academic Fellow of the Asian Bureau of Financial and Economic Research (ABFER), and Co-Founder of Nipun Capital, LLC, a San Francisco based asset management firm focused on Asian equities.

From 2004 to July 2008, Dr. Lee was Managing Director at Barclays Global Investors (BGI; now Blackrock).  As the firm’s Global Head of Equity Research and Co-Head of North America Active Equities, he led BGI’s world-wide active equity research team and was jointly responsible for its North American active equity business.  During his tenure, the firm had over $300 Billion USD in active equity strategies.  He joined Stanford GSB as a Visiting Professor in July 2008 while continuing to serve as a Senior Consultant to BGI, and became a full-time faculty member in July 2009. 

Professor Lee is former Editor or Associate Editor of numerous academic journals in Accounting and Finance, including: the Accounting Review, Journal of Finance, Management Science, Journal of Accounting Research, Journal of Accounting and Economics, Review of Accounting Studies, and the Financial Analysts Journal.

Professor Lee received his BMath from the University of Waterloo (1981), and his MBA (1989) and PhD (1990) from Cornell University.  He has been a faculty member at the Michigan Business School (1990-95) and the Johnson Graduate School of Management, Cornell University (1996-2004).  From 1995-96 he was Visiting Economist at the New York Stock Exchange.  At Cornell he held the Henrietta Johnson Louis Professorship in Management and was Director of the Parker Center for Investment Research. 

Prior to entering academic life, he spent five years in public accounting, the last three in the National Research Department of KPMG, Toronto, Canada. He holds a Certificate in Biblical Studies from Ontario Theological Seminary, and is fluent in Mandarin Chinese.

Academic Degrees

  • PhD in Accounting, Johnson Graduate School of Management, Cornell University, 1990
  • MBA, Johnson Graduate School of Management, Cornell University, 1989
  • Certificate in Biblical Studies, Ontario Theological Seminary, 1986
  • Chartered Accountant, Institute of Chartered Accountants of Ontario, Canada, 1982
  • B of Mathematics, University of Waterloo, Canada, 1981

Academic Appointments

  • Joseph McDonald Professor of Accounting, Stanford GSB, July 2009-present
  • Visiting Professor of Accounting, Stanford GSB, 2008-2009
  • Co-chair of Accounting Department, Guanghua School of Management, Peking University, 2003-2012
  • Henrietta Johnson Louis Professor of Management, Cornell Johnson Graduate School of Management, 1998-2007
  • Director of the Parker Center for Investment Research, Cornell Johnson Graduate School of Management, 1997-2004
  • Associate Professor of Accounting, Cornell Johnson Graduate School of Management, 1996-1997
  • Associate Professor of Accounting, University of Michigan, 1994-1996
  • Assistant Professor of Accounting, University of Michigan, 1990-1994

Professional Experience

  • Global Head of Equity Research, Barclays Global Investors (now Blackrock), 2006-2008
  • Co-Head of North America Active Equity Strategies, Barclays Global Investors (now Blackrock), 2006-2007
  • Head of U.S. Equity Research, Barclays Global Investors (now Blackrock), 2005-2006
  • Director of Accounting Research, Barclays Global Investors (now Blackrock), 2004-2004
  • Visiting Research Economist, New York Stock Exchange, 1995-1996
  • Senior Manager (last position held), National Research Department of KPMG Peat Marwick Thorne, Toronto, Canada, 1982-1985

Awards and Honors

  • Stanford University Asian American Faculty Award for Outstanding Achievements and Service to the University, 2014
  • Distinguished Service Award, PhD Program, Stanford GSB, 2013
  • Wee Cho Yaw Visiting Fellow, National University of Singapore, 2013
  • Graduate School of Business Trust Faculty Fellow, Stanford GSB, 2012-2013
  • Distinguished Visiting Faculty, AAA Doctoral Consortium, 2012
  • Teaching Excellent Award, MSx (formerly Sloan) Program, Stanford GSB, 2012
  • Teaching Excellent Award, MSx (formerly Sloan) Program, Stanford GSB, 2011
  • Robert and Marilyn Jaedicke Faculty Fellow, Stanford GSB, 2010-2011
  • Tang Peng Yeu Distinguished Visiting Professor, National University of Singapore, 2010
  • Price Waterhouse Coopers Global Competency Center Research Grant, 2004
  • Moskowitz Prize for Best Quantitative Study of Socially Responsible Investing, 2003
  • AAA Notable Contribution to Accounting Literature Award, 2003
  • MBA Apple Award for Teaching Excellence, Cornell Johnson School, 1997, 2000, 2003
  • Stephen Russell Distinguished Teaching Award, Cornell Johnson School, 2002
  • Faculty Award for Research Excellence, Cornell Johnson School, 2001

Publications

Journal Articles

Salman Arif, Charles M. C. Lee. Review of Financial Studies. August 14, 2014.
Charles M. C. Lee. Accounting and Business Research. May 21, 2014, Vol. 44, Issue 4, Pages 383-406.
Charles M. C. Lee, Paul Ma, Charles Wang. Journal of Financial Economics. 2014, Vol. Forthcoming.
Charles M. C. Lee, Kevin K. Li, Ran Zhang. The Accounting Review. 2014.
Charles M. C. Lee. China Finance and Accounting Review. 2014, Vol. 16, Issue 2, Pages 10-38.
Daniel M. Beneish, Charles M. C. Lee, Craig D. Nichols. Financial Analysts Journal. 2013, Vol. 69, Issue 2, Pages 57-82.
Guohua Jiang, Charles M. C. Lee, Heng Yue. Journal of Financial Economics. 2010, Vol. 98, Pages 1-20.
Charles M. C. Lee, David Ng. Journal of Investing. 2009, Vol. Winter 18, Issue 4, Pages 23-41.

Books

Charles M. C. Lee, Eric C. So Now Publishers, 2014.

Working Papers

In Short Supply: Short-Sellers and Stock Returns | PDF
Charles M. C. Lee, M. Daniel Beneish, D. Craig Nichols, October 52014
Do Short-Sellers Profit From Mutual Funds? Evidence from Daily Trades | PDF
Salman Arif, Azi Ben-Rephael, Charles M. C. Lee, September 152014
Evaluating Firm-Level Expected-Return Proxies | PDF
Charles M. C. Lee, Eric C. So, Charles C. Y. Wang, September 2014
Performance Measurement: An Investor's Perspective | PDF
Charles M. C. Lee, March 272014

Courses Taught

Degree Courses

2014-15

This is an advanced elective course on the economics of active investing in equity markets. The course is designed as a "start-up kit for an equity hedge fund." We will cover some of the foundational skills needed to select and trade stocks, as...

Empirical Research on Financial Reporting: This doctoral-level course covers research on the role of accounting information in capital markets. The focus is on introducing students to key themes in empirical accounting and capital markets...

This course is elected as soon as a student is ready to begin research for the dissertation, usually shortly after admission to candidacy. To register, a student must obtain permission from the faculty member who is willing to supervise the...

Doctoral Practicum in Teaching

Doctoral Practicum in Research

2013-14

This is an advanced elective course on the economics of active investing in equity markets. The course is designed as a "start-up kit for an equity hedge fund." We will cover some of the foundational skills needed to select and trade stocks, as...

2012-13

This is an advanced elective course on the economics of active investing in equity markets. The 2012-13 version of this class will be offered in two parts: A 4-credit class for the Fall quarter (ACCT340), and a 2-credit class for the Spring...

This is a 2-credit advanced elective in equity investing that will be offered in the Spring 2013 quarter. This course is open only to students that were enrolled in Alphanomics (ACCT340) in the Fall of 2012. If you complete ACCT340 in the Fall of...

2011-12

A characteristic of business is the extensive use of accounting data. The financial accounting course has the general objective of developing students' understanding of the nature, scope, and limitations of accounting information. To achieve this...

This is an advanced elective course focuses on the economics of active investing in equity markets. It is designed for students with a strong interest in equity investing, either personal or professional. In particular, it should be helpful to...

This course examines selected topics in accounting research. The course features four faculty who will each give a focused look at a given area, introduce students to important questions in that area, key papers in the related literature, and...

This course is open only to students participating in the Stanford-Tsinghua Exchange Program and is required of those students. Requirements include researching and reporting on companies to be visited, attending lectures in preparation for the...

2010-11

A characteristic of business is the extensive use of accounting data. The financial accounting course has the general objective of developing students' understanding of the nature, scope, and limitations of accounting information. To achieve this...

This course focuses on the economics of informational arbitrage in equity markets. Our underlying premise is that stock prices are not established by fiat; they are the result of a costly and risky arbitrage process. We will seek to better...

This course examines selected topics in accounting research. The course features four faculty who will each give a focused look at a given area, introduce students to important questions in that area, key papers in the related literature, and...

This course is open only to students participating in the Stanford-Tsinghua Exchange Program and is required of those students. Requirements include researching and reporting on companies to be visited, attending lectures in preparation for the...

Service to the Profession

  • The Accounting Review, Co-Editor, 2011-2014
  • Management Science, Associate Editor in Finance, 2009-2011
  • Journal of Accounting and Economics, Associate Editor, 2000-2006
  • Journal of Accounting Research, Editorial Board, 2001-2003
  • Journal of Finance, Associate Editor, 2000-2003
  • Review of Accounting Studies, Co-Editor, 1996-2006
  • Financial Analysts Journal, Associate Editor, 1999-2008
  • Journal of Financial Markets, Associate Editor, 1996-2008
  • AAA Doctoral Consortium: Distinguished Visiting Faculty, 1999, 2003, 2012
  • AAA New Faculty Consortium: Lecturer on Teaching Effectiveness, 1998, 1999, 2003, 2004, 2005, 2006, 2009; Team Leader, 1995, 1996; Planning Committee, 1998-1999
  • AAA Innovation in Accounting Education Award Committee, 2003-2004
  • AAA Research Advisory Committee, 1998-2002
  • AAA Annual Meeting Program Selection Committee, 1993, 1994, 1996, 1999
  • AAA Financial Accounting and Reporting Concepts Committee, 1996-1997
  • AAA Financial Accounting Standards Committee, 1995-1996
  • AAA Notable Contribution Award Screening Committee, 1994-1995

Insights by Stanford Business

July 2, 2014
An accounting professor says shareholders need accountants to keep track of asset history, not to forecast future prices.
November 14, 2013
New research suggests these companies performed better than their reputation suggested.
November 1, 2010
Research shows that firms in countries perceived as less corrupt trade at bigger market premiums than those in places deemed more corrupt.

School News

June 4, 2013
Stanford GSB students honor three professors for their extraordinary teaching skill.
June 4, 2012
Stanford GSB students recognize Dirk Jenter, Charles Lee, and Jeremy Bulow for their passionate teaching of challenging subjects.