Investing Research Articles

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.

Does the conventional wisdom to “sell in May,” with the average stock return during November-April far exceeding that for May-October, work for the world equity market? If so, why? In the November 2005 version of his paper entitled “The Optimism Cycle: Sell in May”, flagged by a reader, Ronald Doeswijk examines the hypothesis that this… Keep Reading

…in contrast with cited research, limited tests do not support a belief that the stock market reliably generates higher and less volatile returns when the U.S. Senate is not in session.

A reader wondered: “Is astrology more or less accurate than Jim Cramer?” She suggested that we check by reviewing the monthly stock market predictions of SootheSayer Linda Schurman, available back to August 2004. As an astrologer, Linda Schurman states that her “profession is all about cycles…” The table below quotes forecast highlights from the cited source… Keep Reading

…investors who pick stocks may want to focus on two firm characteristics: (1) investment-to-assets ratio; and, (2) return on assets. Evidence indicates that these two characteristics are foundational to a broad range of stock return anomalies.

…investors may want to investigate the commentaries of unfamiliar experts who accrue significant user-initiated interest as evidenced by search frequency.