Face-to-Face Social Interactions and Local Informational Advantage
Some investment edge still depends on trust, nuance, and soft information that does not travel as well through screens.
About Elisabetta Basilico, PhD, CFA
Dr. Elisabetta Basilico is a seasoned investment professional with an expertise in "turning academic insights into investment strategies." Research is her life's work and by combing her scientific grounding in quantitative investment management with a pragmatic approach to business challenges, she’s helped several institutional investors achieve stable returns from their global wealth portfolios. Her expertise spans from asset allocation to active quantitative investment strategies. Holder of the Charter Financial Analyst since 2007 and a PhD from the University of St. Gallen in Switzerland, she has experience in teaching and research at various international universities and co-author of articles published in peer-reviewed journals. She and co-author Tommi Johnsen published a book on research-backed investment ideas, titled Smarte(er) Investing. How Academic Insights Propel the Savvy Investor. You can find additional information at Academic Insights on Investing.The Performance of Small Business Investment Companies
Congress created the Small Business Investment Company (SBIC) program in 1958, allowing private funds to invest in small firms using leverage supported by the U.S. Small Business Administration (SBA). The natural concern is whether a government-supported structure sacrifices returns in pursuit of policy goals. This research suggests the opposite.
Increases CAPE Ratio Predictability with a Simple Adjustment
CAPE has long been a cornerstone of long-horizon return forecasting. Critics argue that its predictive power has faded in recent decades. This paper pushes back.
The Best Defensive Strategies: Two Centuries of Evidence
Which defensive strategies have actually worked, and do the conclusions survive when we evaluate them over multiple centuries rather than a few decades?
Fund Selection When Borrowing Is Restricted
Once borrowing is realistically restricted, the Sharpe ratio can stop lining up with what investors actually care about: utility. This paper argues that in this constrained world, the geometric mean is a better compass.
Exploiting Myopia: The Returns to Long-Term Investing
Markets are often assumed to be efficient across horizons, with prices reflecting fundamentals regardless of who holds the asset or for how long. Recent research challenges this assumption by showing that the investment horizon of shareholders itself shapes prices and future returns.
The Stock Market and Bank Risk-Taking
While public listings are often viewed as a sign of strength, scale, or access to capital, recent research suggests a more subtle consequence: going public changes how banks take risk.
Financial Regulation and AI: A Faustian Bargain?
Financial regulation has always faced a trade-off between simplicity and precision. Simple rules are transparent and robust, but often miss where risks actually build up. More sophisticated tools can be more precise, but they are harder to understand, harder to explain, and sometimes change behavior in unexpected ways.
The Secular Decline in Interest Rates and the Rise of Shadow Banks
Over the last 20 years, a massive shift has occurred, with "shadow banks"- non-depository institutions like Quicken Loans -capturing nearly half of all originations. While many attribute this to new technology or post-crisis rules, recent research reveals a deeper economic catalyst: the secular decline in interest rates..
Retired Investors Should Stop Trading So Much
Retirement creates a sudden jump in leisure time. That should reduce information-processing barriers. The question is: does having more time change how people trade, and does it improve outcomes?
Do indexes time the market?
This paper shows there is a durable, stock-specific momentum component tied to how prices react to firm news around earnings dates. The result is a cleaner, lower-risk way to capture momentum without leaning so heavily on broad factor moves.
How Geopolitics is Being Priced in Real Time
By reading earnings calls and analyst reports at scale, algorithms can identify who is applying pressure, who is being targeted, which instruments are used, and how firms respond. The result is a new way to observe geopolitical risk as it actually enters corporate decision making.
Does regulation actually clean up bad behavior?
This paper explores how FINRA’s efforts to discipline “bad brokers” often lead to regulatory leakage—problematic advisors leaving one firm only to resurface elsewhere.
Institutions’ return expectations across assets and time
This paper shows how return expectations are formed: largely via a common “building-block” model (dividend yields, earnings growth, inflation, P/E changes), and how they vary across asset classes, time periods, and institutions.
How costly are cultural biases? Evidence from FinTech
This paper examines how cultural biases affect high-stakes decisions in a FinTech setting, showing that even when information is the same, the social groups we prefer can lead us into worse outcomes. The result: bias isn’t just unethical, it’s expensive.
Policy news and stock market volatility
This paper builds a new measure of “equity market volatility” using newspaper articles and finds that policy-related news (fiscal, monetary, trade, regulation) explains a large share of volatility spikes.
Momentum factor investing: Evidence and evolution
Momentum works, across markets, time periods, and portfolio designs. But it also has weak spots, especially during market reversals, which risk-aware construction can help manage.
How New Laws Reshaped Stock Market Participation
Over the past two decades, middle-class Americans have quietly changed how they invest. This paper shows that the share of investable wealth held in stocks has risen—and become systematically linked to age. The driving force? The Pension Protection Act (PPA), which made target date funds (TDFs) the default option in retirement plans.
Do persuasive personalities deliver subpar performance?
Using thousands of real pitch recordings, the authors find that presentation style drives funding success even when fundamentals are identical. The catch: the most persuasive founders don’t always build the best businesses.
Do Mutual Fund Flows Really Say What We Think They Say?
For decades, mutual fund flows have been a workhorse variable for understanding investor behavior, market sentiment, and price impact. But what if the way we measure them distorts the story?