Investing Expertise
Can analysts, experts and gurus really give you an investing/trading edge? Should you track the advice of as many as possible? Are there ways to tell good ones from bad ones? Recent research indicates that the average “expert” has little to offer individual investors/traders. Finding exceptional advisers is no easier than identifying outperforming stocks. Indiscriminately seeking the output of as many experts as possible is a waste of time. Learning what makes a good expert accurate is worthwhile.
Filtering the Luck Out of Mutual Fund Performance Data March 10, 2008
…dramatic growth in the number of actively managed mutual funds has driven the proportion of truly skilled funds down, without commensurate reduction in average fund fees and expenses.
The Wall Street Journal’s SmartMoney Fund Screen February 27, 2008
…the Wall Street Journal’s SmartMoney Fund Screen column may have value for picking international and hybrid mutual funds. It is probably not useful for picking domestic equity, sector or fixed income funds, for which strong past performance does not persist after publication.
Comprehensive Overview of Research on Equity Analyst Forecasting February 21, 2008
…this paper provides a comprehensive and organized overview of past research on equity analyst inputs, processing and outputs.
Reliable Outperformance Among Bond Fund Managers? January 25, 2008
…past performance is significantly indicative of future performance among bond mutual funds.
Analyst Ratings: Levels or Changes? December 31, 2007
…investors may find edges by considering both the levels of and changes in analyst stock ratings, with the combination more powerful than the separate indications.
Mutual Fund Investors Underperform Their Underperforming Funds? December 14, 2007
…mutual fund timers on average underperform passive buy-and-hold mutual fund investors. Investors who use fund-compensated investment advisors exhibit particularly bad timing.
Invest Like the Ivy League? November 9, 2007
…investing like the Ivy League means a contrarian emphasis on small growth factors with heavier than average use of hedge funds and private equity funds.
The Stock Picking Expertise of the Business Media October 24, 2007
…neither journalists nor their informants can systematically and accurately predict stock prices.
Slim Pickings Among Stock Picks of Columnists? October 16, 2007
…the buy recommendations of columnists in prominent business magazines on average underperform an equal-weighted benchmark over the weeks, months and first year after publication. Columnists in Forbes tend to outperform those in Business Week and Fortune.
Concentrating the Superior Knowledge of Short Sellers October 9, 2007
…investors can concentrate the informed signals of short sellers by locating stocks with high short interest and low institutional ownership, and an increasing ratio of short interest to institutional ownership.
Finding the Sources and Methods of Financial Expertise in a Haystack August 30, 2007
…the difference between expert and non-expert performance in investing and financial forecasting is small, making it difficult to discover the nature of financial expertise. Tests of expertise must be realistic.
Do Finance Professors Believe in Market Efficiency? August 15, 2007
…finance professors generally reject the value of technical analysis and mostly reject the value of public information in predicting stock returns, but they accept the importance of private information. However, about one fifth of them adopt investing goals that disregard their stated market efficiency beliefs.
Caught in Cash for an Entire Bull Market August 3, 2007
But the market is just unsafe at any speed…
Caught in the Too Fast Lane August 2, 2007
But other people were forecasting even higher…
Today’s Risk Analysis August 1, 2007
Risk analyzing stormy weather…
