Investing Research Articles

…equity returns may react quickly to some predictors and slowly to others, and they may respond most strongly to short or extended predictor movements. “Standardized” approaches to predictor interval measurement may not work.

We evaluate here the weekly “The Outlook” column in BusinessWeek online by Standard and Poor’s since May 2003 (the earliest available). According to Standard & Poor’s, “‘The Outlook‘ is a unique investment advisory service…[that] provides solid research, unbiased investment ideas and market perspective… [It] presents investment information and advice in a concise way that helps… Keep Reading

…the well-known stock market anomalies may be much less reliable in rational practice than they appear in hindsight.

…investors may be able to exploit time variation of the value premium based on the state of the economy, moving out of (into) value as recessions approach (end).

Do 52-week highs and lows trigger unusual trading and returns for individual stocks? In their recent paper entitled “Volume and Price Patterns Around a Stock’s 52-Week Highs and Lows: Theory and Evidence”, Steven Huddart, Mark Lang and Michelle Yetman examine the evidence that past price extremes influence trading decisions, with focus on 52-week highs and… Keep Reading

…the nonfarm payroll, GDP advance and ISM manufacturing data releases move markets the most, affecting interest rates and currency exchange rates more than stocks. Impacts are most pronounced immediately after release.

…evidence from simple tests does not support a belief that there is a systematic relationship between the annual rate of FDIC bank closings and assistance transactions and annual U.S. stock market returns.

…traders may have difficulty exploiting mispricing of stocks based on analyst disagreement about future earnings, because mispricing and trading friction rise and fall together. Small, nimble traders who carefully manage trading costs may have the best shot.

…retrospective analysis indicates that investors can identify growth stocks, but the long-term premium they pay for them is about twice that warranted by actual growth.

…very small numbers of extreme return days have a massive impact on long-term stock returns in emerging markets. The naive probability of predicting which days will be extreme is very low.