Investing Research Articles

…investors can significantly outperform the broad U.S. stock market by rotating into cyclical (noncyclical) sectors when the Federal Reserve discount rate begins falling (rising).

…sloppiness in applying statistics can lead to severe misestimates of variability. People should rely on definitions, not intuitions, in assessing volatility.

…volatility-based portfolio strategies derive their effectiveness from: (1) the difference between realized volatility and implied volatility ; and, (2) the difference between call-implied volatility and put-implied volatility.

Does strong (weak) past growth in a company’s total assets predict high (low) future stock returns? Or, does investor overreaction to past data predict the opposite? In the July 2007 update of their paper entitled “Asset Growth and the Cross-Section of Stock Returns”, flagged by a reader, Michael Cooper, Huseyin Gulen and Michael Schill examine… Keep Reading

…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.

…fund investors should focus on funds with high “Active Shares” (holdings very different from their benchmark indexes), low assets under management and high last-year returns.

A reader inquires: “Ken Fisher did a statistical study in his book, The Only Three Questions That Count: Investing by Knowing What Others Don’t, which states that growth (value) is in favor when the yield curve flattens (steepens). Any truth to this?” To test this hypothesis, we compare the performances of paired growth and value… Keep Reading

…removal of the tick test for short selling apparently: (1) mitigates overvaluation of stocks; (2) leads to temporary undervaluation of easily borrowed stocks; and, (3) disrupts trading systems that rely on dispersion of analyst earnings forecasts.

…the book is a clear and concise summary of Louis Navellier’s systematic approach to constructing and maintaining a timely growth stock portfolio intended to outperform in all market conditions.

Robert McHugh, Ph.D. sent comments on our review of his stock market commentaries (“Robert McHugh: Caution Is Warranted”). The following exchange presents Dr. McHugh’s messages without editing. We have edited our responses for formality, brevity and inclusion of links: