Detecting Wisdom in a Crowded Market
May 6, 2005 - Animal Spirits, Investing Expertise, Sentiment Indicators
…situations involving herded traders and/or a small number of shareholders are good candidates for producing mispriced stocks.
May 6, 2005 - Animal Spirits, Investing Expertise, Sentiment Indicators
…situations involving herded traders and/or a small number of shareholders are good candidates for producing mispriced stocks.
May 4, 2005 - Investing Expertise
…expertise does not mitigate bias. Even highly experienced investors/traders should consider measuring their estimation errors for related tasks to calibrate their judgments.
May 1, 2005 - Investing Expertise, Mutual/Hedge Funds
…portfolio changes after achieving the Morningstar 5-star rating hurt fund performance, and investors should be cautious about using this rating as the principal means of selecting mutual funds. Handling large cash inflows attracted by the high rating may be the culprit.
April 24, 2005 - Cartoons, Investing Expertise
If your crystal ball has not been working so well…
April 23, 2005 - Investing Expertise
In their March 2005 paper entitled “Do Sell-Side Analysts Exhibit Differential Target Price Forecasting Ability?”, Mark Bradshaw and Lawrence Brown test the accuracy of 12-month stock price targets both for individual analysts and for analysts overall. Using a filtered sample of about 100,000 individual 12-month stock price targets from Thomson Financial over the period 1997-2002,… Keep Reading
April 19, 2005 - Short Selling
…short sellers throw in the towel (throw more punches) when stock prices move against (with) their positions.
April 16, 2005 - Animal Spirits
…given that trading involves logical reasoning, numerical computation and long-term planning, one component of successful trading may be a reduced level of emotional reactivity.
April 14, 2005 - Equity Premium
…stocks have significantly outperformed less risky asset classes in the U.S. for over 200 years. Volatility comes with the outperformance.
April 12, 2005 - Cartoons, Investing Expertise, Mutual/Hedge Funds
…smart young (hedge fund) drivers wanted.
April 11, 2005 - Technical Trading
In their March 2005 paper entitled “Re-Examining the Profitability of Technical Analysis with White’s Reality Check and Hansen’s SPA Test”, Po-Hsuan Hsu and Chung-Ming Kuan examine the profitability of a very large universe of technical trading rules and strategies against the Dow Jones Industrial Average (DJIA), S&P 500, NASDAQ Composite and Russell 2000 stock indexes…. Keep Reading