May 10, 2010 - Investing Expertise
…evidence indicates that expert analysts who have relatively high prior earnings forecasting accuracies, forecast frequencies and forecast revision frequencies and who cover relatively few companies and industries make abnormally good stock recommendations.
July 19, 2012 - Fundamental Valuation
How prevalent is earnings manipulation among U.S. public companies? What indications warn investors of the likelihood of earnings manipulation? In their July 2012 paper entitled “Earnings Quality: Evidence from the Field”, Ilia Dichev, John Graham, Campbell Harvey and Shiva Rajgopal explore earnings quality issues based on results of an anonymous survey of public company Chief Financial Officers… Keep Reading
June 26, 2017 - Fundamental Valuation, Strategic Allocation
Is there a way to enhance the ability of the cyclically-adjusted price-to-earnings ratio (P/E10 or CAPE) to predict U.S. stock market returns by incorporating real interest rates? In their June 2017 paper entitled “Improving U.S. Stock Return Forecasts: A ‘Fair-Value’ Cape Approach”, Joseph Davis, Roger Aliaga-Diaz, Harshdeep Ahluwalia and Ravi Tolani introduce “fair-value” CAPE that accounts for a… Keep Reading
July 1, 2013 - Economic Indicators
How does central bank quantitative easing (QE) affect various financial markets? In the May 2013 preliminary and incomplete version of his paper entitled “The Time Horizon of Price Responses to Quantitative Easing”, Harry Mamaysky investigates how U.S. Federal Reserve (Fed), European Central Bank (ECB) and Bank of England (BoE) QE announcements affect the prices of… Keep Reading
June 9, 2020 - Economic Indicators, Sentiment Indicators
In reaction to “Federal Reserve Holdings and the U.S. Stock Market”, a subscriber suggested analysis of market reactions to announcements (starts/ends) of major Federal Reserve System interventions, such as the series of quantitative easing (QE) initiatives. Reactions to such announcement should precede changes in actual holdings. To investigate, we look at cumulative returns of SPDR… Keep Reading
February 26, 2010 - Fundamental Valuation, Value Premium
…evidence suggests that book-to-price ratio and earnings yield explain future stock returns better jointly than individually by more completely anticipating future earnings growth.
March 27, 2010 - Individual Gurus - Guru Accuracy: 40%
As suggested by a reader, we evaluate here the weekly commentary of John Mauldin in “Thoughts from the Frontline” since January 2001 (the earliest available). According to his web site: “John Mauldin is a renowned financial expert, a New York Times best-selling author, and a pioneering online commentator. Each week, over 1 million readers turn… Keep Reading
November 25, 2024 - Equity Premium, Fundamental Valuation
Is U.S. equity market valuation outrunning its productive value? For perspective, we compare the trajectories of S&P 500 (SP500) index, earnings and dividends over recent decades and look at some potential explanations for divergences. Using quarterly SP500 data and 10-year U.S. Treasury note (T-note) yield during March 1988 through September 2024 and Shiller data as… Keep Reading
January 12, 2007 - Fundamental Valuation
…surprisingly strong (weak) aggregate earnings news, as an indicator of high (low) future inflation, may portend relatively low (high) future stock returns.
November 12, 2013 - Fundamental Valuation
What do insiders regard as red flags for corporate earnings manipulation? In their May 2013 paper entitled “Earnings Quality: Evidence from the Field”, Ilia Dichev, John Graham, Campbell Harvey and Shiva Rajgopal report earnings quality insights from Chief Financial Officers (CFO) of publicly owned companies via 169 responses to an anonymous online survey, plus 12 telephone… Keep Reading