Trusting an Advisor Costs Big Money, but Lowers Stress
Money Doctors Gennaioli, Shleifer, and Vishny (2015) A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic [...]
Daily Academic Alpha: Factors Abroad
Interaction of Size and Momentum Effects in Jordan Firms: 2005-2014 This study sought to disentangle the effects of size and whether there are size and [...]
Daily Academic Alpha: Public Actors
Public Actors in Private Markets: Toward a Developmental Finance State The nation's recent financial crisis brought into sharp relief fundamental questions concerning the social function [...]
Distribution Economics: Understanding Wall Street’s Conflict of Interest Problem
The simple matter is that most clients know how to buy groceries, but few know how to purchase financial products. In the murky world of financial services, clients may be buying products for the first time. More importantly, this purchase is the driver of their long-term financial security. Years of hard work, thrift, and responsible life choices, are baked into each and every retirement portfolio that a banker must now serve. In short, the stakes are too high and the cards are stacked too favorably towards one party. Fiduciary responsibility matters in financial services more than in any other product category outside of urgent medical care. Shouldn't this fiduciary have your best interests at heart? Just as you don't want your doctor to receive kickbacks from Pfizer for overdosing you on Oxycodone, why would you want your financial advisor--or their institution--to receive kickbacks for overdosing you on inefficient, overpriced, investment product that probably won't help you achieve your investment goals? Moral of the story: Ask your banker, or bank-affiliated advisor these questions. If you get answers that sound like the ones above, it might be time to buy a car or an airline ticket, because traveling via railroad is a thing of the past.
Daily Academic Alpha: Momentum Investing
Fundamentally, Momentum is Fundamental Momentum Momentum in firm fundamentals, i.e., earnings momentum, explains the performance of strategies based on price momentum. Earnings surprise measures subsume [...]
Adam Nash: “Schwab has Become Merrill Lynch”
Adam Nash, the CEO of WealthFront.com, recently made a simple observation: Schwab has thrown their clients under the bus. The irony is that Schwab has 4 transcendent values: No [...]
Which Value Investing Metrics Should You Trust?
Barry has a nice piece in the Washington Post asking a simple question: What is the best valuation metric to assess if a stock is cheap or [...]
6 High-Net-Worth Tax-Trades with Targets on Their Back
Our good friends at the government have compiled their newest list of tax-tricks that anger them the most. Or in their words, how tax pros [...]
Why The Low-Volatility Anomaly Exists
Benchmarks as Limits to Arbitrage: Understanding the Low-Volatility Anomaly Baker, Bradley and Wurgler A version of the paper can be found here. Want a summary of [...]
Timing Value and Momentum with Valuation-Spreads
We were recently passed along an article suggesting that valuation spreads, or the spread in a valuation metric across the most expensive and least expensive stocks, matters [...]
Buffett and Hedge Funds Share a Trait: No Alpha
Aaron Seager, a portfolio manager at Arbor Hill Advisors, offered up the following charts showing alpha over the past 15 years for Warren Buffett and an [...]
Did Warren Buffett Move the Goalposts in the Latest Letter?
It appears even the Oracle of Omaha may be vulnerable to short term performance pressures. The Berkshire report came out today, and it has magically [...]
Dissecting Goldman’s 99 percentile Market-Timing Signal
Investors have been worrying, at least for the last several years, that the market is overvalued. By some measures this is undoubtedly true. Just yesterday we highlighted that [...]
Market Valuations based on CAPE–A Deeper Dive
We have discussed market valuations in the past, but the issue of market valuations was recently raised on CNBC, when Robert Shiller suggested he may shift out [...]
Top 5 Geeky, Yet Funny, Economic Paper Titles
As many are aware, economists aren't the funniest group in the crowd. Here are some sample jokes from the funniest economists out there--Yoram Bauman. Here [...]
Can you Predict Stock Market Returns with Short Interest?
Short Interest and Aggregate Market Returns Rapach, Ringgenberg and Zhou A version of the paper can be found here. Want a summary of academic papers with [...]
Global Debt: A Scary Situation with Limited Solutions
Earlier this month, McKinsey published a remarkable report on trends in global debt, and concludes that the world's debt, rather than decreasing, is in fact [...]
The Wrong Way to Pick Value Investing Funds
US News laundry lists their top 10 "Value Investing Funds," or Value Investing ETFs, in their recent article: http://money.usnews.com/funds/etfs/rankings/value-funds The criteria (and weighting) for selecting so-called [...]
Quant Geek Weekend Finance Homework
Recently Discovered Research You Might Have Missed: To Hedge or Not to Hedge? (Morningstar.com) The Very Cheapest Stocks (P/B) Do Very Badly (Millennial Invest) Exploring Social Media [...]
A Tactical Asset Allocation Horserace Between Two Thoroughbreds
Executive Summary: Dual Momentum, a concept pioneered by Gary Antonacci, intelligently combines elements of two types of momentum investing strategies -- absolute and relative momentum -- [...]