The Smart Money Indicator: A New Risk Management Tool
We have all heard the mantra, “You can’t time the market!” But in reality, investors attempt to do just that every day as part of [...]
Does Financial Education Actually Improve Outcomes? It’s Complicated.
The Causal Mechanism of Financial Education: Evidence from Mediation Analysis Fenella Carpena and Bilal ZiaA version of this paper can be found hereWant to read our [...]
Manager Sentiment and Stock Returns
Manager Sentiment and Stock Returns Fuwei Jiang, Joshua Lee, Xiumin Martin, Guofu Zhou Journal of Financial Economics, forthcoming A version of this paper can be [...]
Compound Your Knowledge: Episode 3–Factor Failure, China, EBITDA
In today's video, we examine three posts. First, we examine Larry Swedroe's rebuttal to the "failure" of factor investing. Second, we examine a paper examining [...]
Size and Value in China
Size and Value in China Jianan Liu, Rob Stambaugh, and Yu Yuan Journal of Financial Economics A version of this paper can be found here What [...]
EBITDA, EBITDA, EBITDA…that’s all, folks!
Value investing practitioners and academics have long studied the enterprise multiple effect, including my own business partners, Jack and Wes. The literature reveals that Enterprise [...]
“The Failure of Factor Investing was Predictable”
In a recent ETF column, Allan Roth listed five investment lessons. While I agreed with much of what he wrote, one claim—factor investing has “failed [...]
Compound Your Knowledge: Episode 2–ESOPs, Factors, Incentives
In today's video, we examine three posts. First, we examine ESOPs and 1042 QRP (qualified replacement property) with Doug Pugliese. Second, we examine a guest [...]
Value, Momentum & Carry Across Asset Classes
There is a 72% probability of the San Franciso Bay Area getting hit by at least one earthquake of a magnitude of 6.7 or stronger between [...]
1042 QRP: How to Finance a Seller Note
Employee Stock Ownership Plans (“ESOP”) create unique opportunities for business owners and their employee-participants to build wealth through their companies. To foster broader adoption of [...]
Rankings and Risk-Taking in the Finance Industry
Rankings and Risk-Taking in the Finance Industry Michael Kirchler, Florian Lindner, and Utz WeitzelThe Journal of Finance, Fall 2018A version of this paper can be [...]
Buyback Blackout Periods Do Not Negatively Impact Market Performance
The October 2018 market correction where the S&P 500® Index fell by 7%, its worst October since 2008,[ref]Bloomberg Finance L.P., as of 10/31/2018.[/ref] left investors [...]
Compound Your Knowledge: Episode 1
Welcome to the newly re-titled weekly video, Compound Your Knowledge. In today's video, we examine three posts. First, we examine a simple analysis of 2018 [...]
Equity investing is Riskier than You Probably Expected
Volatility Lessons Eugene F. Fama and Kenneth R. French Financial Analysts Journal A version of this paper can be found here Want to read our summaries [...]
Payday Anomaly Revisited
Unless you are a die-hard buy-and-hold investor, chances are that you need to rebalance your portfolio at some point. The question is when? And how [...]
Herding and Mutual Fund Performance
Does Herding Behavior Reveal Skill? An Analysis of Mutual Fund Performance Hao Jiang and Michela VerardoThe Journal of Finance, Fall 2018A version of this paper [...]
A Simple Analysis of 2018 U.S. Factor Returns
As the year turns, a common practice is to assess a portfolio and see how each position performed. The summary for stocks is easy: equities [...]
Why and How Investors use ESG Information
Why and How Investors Use ESG Information: Evidence from a Global Survey Amir Amel-Zadeh and George Serafeim Financial Analysts Journal A version of this paper [...]
Discipline: A Necessary Condition for Successful Investing
A good friend, Sherman Doll, related the following story. Sherman has been a two-line sport kite flier for years. While not a pro, he has [...]
Warren Buffett is Wrong About Options (Except)
Warren Buffett sold long-dated, deep out of the money puts in the years leading up to the financial crisis. In his 2008 Annual Letter to [...]