Gurus and Incredible Certitude
July 28, 2010 - Investing Expertise
…for the sake of realism, investment strategy developers should rigorously examine the defensibility of any assumptions embedded in their inference processes.
July 28, 2010 - Investing Expertise
…for the sake of realism, investment strategy developers should rigorously examine the defensibility of any assumptions embedded in their inference processes.
July 27, 2010 - Fundamental Valuation
…evidence indicates that investors may be able to earn abnormal returns by exploiting systematic outperformance (underperformance) of stocks with very low (high) historical accrual volatilities.
July 26, 2010 - Animal Spirits, Individual Investing
…experimental evidence indicates that participation in stock message boards/forums increases a typical investor’s propensity to trade and decreases actual investment performance. Investors may want to factor this effect into their information search and processing practices.
July 22, 2010 - Technical Trading
…evidence indicates that success of high-frequency trading of paired stocks likely depends critically on minimizing trading friction, balancing trading friction and trigger sensitivity and reacting quickly to triggers, and perhaps on being especially alert during the first hour of trading.
July 21, 2010 - Mutual/Hedge Funds
…evidence indicates that hedge funds with low net market exposure may earn returns largely by assuming that correlations between assets and asset classes will behave predictably, and rogue correlation spikes may swamp these funds with extremely large drawdowns.
July 20, 2010 - Mutual/Hedge Funds, Sentiment Indicators
…evidence indicates that hedge fund investors may be able to gain an edge by limiting consideration to funds with recent corporate releases but no other recent media coverage.
July 16, 2010 - Animal Spirits, Individual Gurus
…evidence indicates that investors can capture a large portion of Berkshire Hathaway’s long-term outperformance by mimicking holdings described in the company’s SEC disclosures, because many other large traders do not.
July 15, 2010 - Momentum Investing, Sentiment Indicators
…evidence from limited tests suggests that online search activity may help predict which recent winning and losing stocks will continue winning and losing.
July 13, 2010 - Technical Trading
…investors may be able to identify stocks inclined to outperform and underperform over the long term based on the degree to which their short-term returns track market and industry returns.
July 12, 2010 - Fundamental Valuation, Political Indicators
In their June 2010 book Capital Rising: How Capital Flows Are change Business Systems All Over the World, authors Peter Cohan and Srinivasa Rangan mine lessons from 47 case studies to “describe the phenomenon of capital flows, present new ways to think about what causes them to rise and fall, and describe ways that our… Keep Reading