Woefully Neglected Evidence on Systematic Decision Making
50 Years of Successful Predictive Modeling Should Be Enough: Lessons for Philosophy of Science Our aim in this paper is to bring the woefully neglected literature on [...]
Imagine the World in 2035: No “poor” countries
Bill and Melinda Gates think it is possible: By 2035, there will be almost no poor countries left in the world. Check out the Gates [...]
Models vs. Experts: #15: Do Behavioral cues matter?
Psychiatric diagnoses: A study of how they are made Kendell, R. E. British Journal of Psychiatry, 122, 437-445 An online version of the paper can [...]
The Psychology of Scarcity: Part 2 of 2 (Bonus! Scarcity in Asset Allocation)
How can one optimize performance and decision-making when one is affected by scarcity? This is the subject of Part 2 of our 2-part scarcity series. [...]
Confirmation Bias Strikes Again…
http://www.cnn.com/2014/01/17/travel/southwest-wrong-airport The pilots of Southwest flight 4013 say that Branson Airport was correctly programmed into their on-board computer Sunday, but that they "mistakenly identified" another [...]
Fama Doesn’t Deserve a Nobel Prize?
Marty Whitman makes a bold statement in his recent letter: “I am disappointed that a Nobel Prize was awarded to Eugene Fama, who studies only markets and [...]
How many times has the S&P 500 been over 32%?
What's your guess? Seriously, before looking at the answer below... And the answer is... scroll. scroll. scroll. scroll. scroll. scroll. scroll. scroll. scroll. scroll. scroll. [...]
The Psychology of Scarcity: Part 1 of 2
"…The inconveniences of a real scarcity cannot be remedied; they can only be palliated.” - Adam Smith, Chapter V, The Wealth of Nations As Adam [...]
Is Volatility for Misguided Geeks?
Warren Buffett doesn’t like it when people use volatility to measure risk. He succinctly describes his criticism: We bought The Washington Post Company at a [...]
What is Behavioral Finance?
Behavioral finance means a lot of things to a lot of people. In this short piece I'll outline what "behavioral finance" means to academic researchers. [...]
Quant Jocks and Tire Kickers
I just love the title of this paper... A job market paper for a PhD student (Jane Zhao) who was on the market a few [...]
Pensions and the Tragedy of the Flypaper Effect
Arthur Okun showed that "money sticks where it hits," just a flies do to flypaper. Almost everyone has used flypaper from time to time. If [...]
Happy Thanksgivukkah!
Thanksgiving. Hanukkah. Why not Thanksgivukkah? Below, one of my partners hopped on his Bloomberg and plotted out some interesting time series: Turkey spot prices. Hanukkah [...]
Predicting Stock Returns with Investor Sentiment
Market participants often claim that investor sentiment matters for stock returns. This premise was formally studied by Malcolm Baker and Jeffrey Wurgler in their landmark [...]
Black Friday, Retailers and the Availability Heuristic
The term “Black Friday” has been used for many years to describe the day after Thanksgiving, which for retailers marks the beginning of the holiday [...]
“Better Information” Does Not Equate to Better Returns
The value of information in a multi-agent market model Bence Toth, Enrico Scalas, Jurgen Huber and Michael Kirchler A version of the paper can be [...]
Mean Regression and the Value Anomaly
For many investors, it is an article of faith that value investing is the best approach to investing in public equities. Value investors, who are [...]
The Case for Systematic Decision-Making
?? Homo Economicus versus Homo Sapiens Dick Thaler and Cass Sustein in their NY TIMES bestseller, NUDGE, describe two people in the world: Econs and [...]
Recommending the Trend: a Behavioral Basis for Momentum Strategies
As many investors know, Eugene Fama developed the efficient-market hypothesis (EMH) at the University of Chicago in the 60s, and it subsequently flourished across academia. [...]
Models vs. Experts #13: Let the Computer Decide who is Suicidal?
A probabilistic system for identifying suicide attempters Gustafson, D. H., Greist, J. H., etal Computers and Biomedical Research, I0, 1-7 An online version of the [...]