Investing Research Articles

…the Wall Street Journal’s SmartMoney Fund Screen column may have value for picking international and hybrid mutual funds. It is probably not useful for picking domestic equity, sector or fixed income funds, for which strong past performance does not persist after publication.

…investors may be able to exploit local bias-induced undervaluation (overvaluation) of stocks headquartered in U.S. states with depressed (exuberant) economies.

…evidence does not support a belief that the “Objective Elliot Wave” method successfully times the broad U.S. stock market. The method appears more to react to past returns than to predict future returns.

…this paper provides a comprehensive and organized overview of past research on equity analyst inputs, processing and outputs.

…in the words of the authors: “The momentum effect, both in the UK and globally, has been pervasive and persistent. Though costly to implement on a standalone basis, all investors need to be acutely aware of momentum. Even if they do not set out to exploit it, momentum is likely to be an important determinant of their investment performance.”

…investors on the whole base their (mis)perceptions of risk and return on feelings rather than rational pricing analysis. Contrarians may be able to exploit the underpricing of “despised” stocks by focusing on small value.

…investors appear to focus on underperforming/losing stocks, cut them more slack and put more money into them.

…investors may want to get a fresh hedge fund horse every two or three years.

…the extraordinary performance claimed by IntelligentValue for the Retracement-Value portfolio is likely due to a combination of early good luck and a favorable assumption about trade prices. Investors/traders considering such active trading services should carefully evaluate their trading costs/frictions.

…changing public beliefs in how the economy works (and thereby valuation models) substantially affect long-term interest rates and asset prices. Current beliefs, focused on nominal rather than real interest rates, foster irrational overpricing of assets.