Investing Research Articles

…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 that the results materially overstate the size of these indicator alphas.

…”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 continues to elude us.”

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 Money Show Digest. Mr. Band is editor of the Profitable Investing newsletter and author of the book Contrary Investing: The… Keep Reading

…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 efforts to consider information in conflict with their beliefs.

…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.