Investing Research Articles

Alan M. Newman, Editor of Alan M. Newman’s Stock Market Crosscurrents, wrote on 8/3/09:

...evidence from experimental tests indicates that investor/trader overreaction probably is pervasive, partly driven by overconfidence and not subject to moderation through learning. Overreaction tends to elevate portfolio volatility and reduce portfolio Sharpe ratio.

...the accuracy of the Crosscurrents forecasts/targets for the S&P 500 index during 2001-2008 is probably below the average accuracy achieved by other stock market experts.

As suggested by a reader, we evaluate here the commentaries of Robert McHugh, Ph.D., at Safe Haven since February 2004 (the earliest we can find). Robert McHugh is president of Main Line Investors, Inc., a...

We evaluate here the stock market forecasts of Don Hays since late 2000, shortly after he established his own investment advisory firm. Evaluated predictions/recommendations come indirectly from two sources: (1) first from MarketWatch columns as...

...aggregate data on the performance of the stock trading systems currently offered on Collective2 is not encouraging for traders.

...investors should recognize the difficulty of measuring the value of fundamental investment research in deciding whether or how much to spend for it.

...evidence from simple tests does not support a belief that Steve Sarnoff's option trading recommendations have value. The "Options Hotline" promotional verbiage based on perfect hindsight seems intended more to deceive than to inform.

...a very small sample suggests that Washington Crossing Advisors forecasts the U.S. stock market a little more accurately than does the average U.S. equity expert, but they failed to predict the dramatic decline of 2008.

...the performance of Martin Weiss' premium services in aggregate over the past year is unimpressive.

...Reading Minds and Markets offers an interesting perspective on what matters most in allocating funds to asset classes, but falls short of some other sources in terms of rigor and specificity.

...Full of Bull makes a good case for skepticism in the evaluation of investment research, advice and recommendations, but is incomplete and less convincing as an investing how-to.

...an up (down) January historically indicates February-December outperformance (underperformance) for the broad U.S. stock market, an anomaly best exploited by a strategy of being in stocks (Treasury bills) when January is up (down).

...Quantitative Strategies for Achieving Alpha offers an interesting quantified overview of the performance of various fundamental, sentiment and technical indicators with respect to U.S. stock sorts over the past generation. However, investors should probably assume...

..."despite the many ingenious tools they created to attack the puzzle, much remains unsolved. Discontinuities, irregularities, and volatilities seem to be proliferating rather than diminishing... The goal of wresting society from the laws of chance...

As suggested by a reader, we evaluate here the market-related forecasts of Richard Band since late May 2002. Most of his predictions/recommendations come indirectly via MarketWatch columns, augmented by a few direct commentaries from The...

...evidence indicates that equity investors continuously acting on reasonable but uncertain expectations may experience much higher return volatilities over the long run than suggested by realized stock market volatility in hindsight.

...evidence indicates that investors and analysts tend to extrapolate current earnings shocks and discount their predictable reversion. This shortsightedness manifests as the momentum effect, reflected in both stock prices and analyst cash flow forecasts.

...evidence from many studies indicates that confirmation bias is substantial, with defensiveness outweighing desire for accuracy in driving a preference for confirming over disconfirming information. Individual investors may want to counteract this bias by doubling...

...very limited evidence suggests that regulatory activity reacts to stock market returns with a lag of one to three years and has little or no effect on future stock market returns.

Does the conventional wisdom to “sell in May,” with the average stock return during November-April far exceeding that for May-October, work for the world equity market? If so, why? In the November 2005 version of...

...in contrast with cited research, limited tests do not support a belief that the stock market reliably generates higher and less volatile returns when the U.S. Senate is not in session.

A reader wondered: “Is astrology more or less accurate than Jim Cramer?” She suggested that we check by reviewing the monthly stock market predictions of SootheSayer Linda Schurman, available back to August 2004. As an...

...investors who pick stocks may want to focus on two firm characteristics: (1) investment-to-assets ratio; and, (2) return on assets. Evidence indicates that these two characteristics are foundational to a broad range of stock return...

...investors may want to investigate the commentaries of unfamiliar experts who accrue significant user-initiated interest as evidenced by search frequency.