Investing Research Articles

…as a corollary to mean reversion of firm profitability, asymmetries in small-big and value-growth stock migrations drive the size effect and the value premium.

…relatively simple clones based on exchange-traded instruments perform well enough to be considered as liquid, transparent, scalable and low-cost alternatives to hedge funds for many fund styles.

…operating earnings forecasts are the best simple indicator of stock market valuation.

…high short interest alone does not predict abnormally low future returns. Rather, high short interest for stocks that are particularly risky to trade (high idiosyncratic volatility) predicts low future returns.

…there are a lot of twists and turns to momentum strategy returns. Momentum players should pay attention to the subtleties.

…a pro-Democrat/anti-Republican bias in the mainstream media may affect the economic risk perception of some investors/potential investors, thereby affecting stock valuations.

…media sentiment predicts small surprises in earnings and stock prices, which investors quickly incorporate into stock prices. However, transaction costs offset the surprise returns.

Can traders exploit irrational reactions to Jim Cramer’s stock recommendations by viewers of CNBC’s Mad Money? In their March 2006 paper entitled “Is the Market Mad? Evidence from Mad Money“, Joseph Engelberg, Caroline Sasseville and Jared Williams measure the market’s reaction to Mr. Cramer’s buy recommendations. Using a sample of 246 initial recommendations made by… Keep Reading

…the value of a company’s equity depends on its future cash flows (derived from the company’s growth rate and return on investment) and on the required return on equity.

…mutual fund investors should favor funds having ownership stakes, which directly align managerial incentives with investor goals.