Surprise…Trading More is Profitable for Active Funds!
Warren Buffett make it clear why frequent trading damages one's wealth: "Wall Street makes its money on activity. You make your money on inactivity." (source) [...]
Most CFOs think the US market is overvalued
According to the latest Global Business Outlook survey jointly conducted by Duke University and CFO magazine, 55% of U.S. companies say they think the stock market is overvalued, [...]
Jack presenting at NYC ETF event 11/6
Jack will be presenting at The World of ETF Investing Conference on 11/6 in NYC. Jack is an expert on all things finance and a wealth [...]
Corporate Sport Sponsorship and Stock Returns
The NFL is back!!! Unfortunately, the Eagles may need a new kicker...and now we have to listen to Wes talk trash about the Cowboys victory [...]
Remembering Finance Professor Kent Womack
I was saddened to learn that Kent Womack, an influential Finance Professor at the University of Toronto, passed away unexpectedly last month. Kent's research on [...]
The Case for Active Management…from Vanguard…
Vanguard is a poster child for passive management and is among the companies we respect the most. You'll often hear investors/advisors parroting their use of [...]
Daily Academic Alpha: Pension Fund Returns and High Fees
Nobody can deny a simple empirical fact: higher fees are associated with lower returns, on average (Here is a great paper by Ken French on [...]
Daily Academic Alpha: Misreaction to News Releases
Have you ever read a news release, thinking you'd see the stock jump 5%, but instead the stock drops 5%? For example: Headline: Apple finds [...]
Visualizing Stock Market Risk: 7/1926 to 6/2015
How crazy is current market action? Not that crazy. ...and if you lived through 2008, definitely not that crazy. Seeing a -3%+ or a +3% [...]
Avoid Buying Put Insurance When You are Most Afraid
A timely piece on S&P 500 put option prices. The authors find that S&P 500 put options get too expensive during wild times because of [...]
Market Efficiency Hates Bad Weather
Do Weather-Induced Moods Affect the Processing of Earnings News? Building on research in psychology, we predict that unpleasant weather negatively affects capital market participants’ moods [...]
Algorithm Aversion — Why people don’t follow the model!
There are many studies showing that models beat experts, including the meta-study "Clinical versus mechanical prediction: A meta-analysis" by Grove et al. (2000). However, given [...]
Market timing with Value and Momentum
Yesterday we wrote a post showing a potential way to time the market using valuation-based signals. In the past we have also examined how to use [...]
Daily Academic Alpha: Why Women Should make MORE than Men…
As the proud father of 3 kids (to include 2 daughters), this set of papers, while a bit off the wall, made me smile a [...]
Daily Academic Alpha: International 5-Factor Evidence from Fama and French
About a month ago we posted on the robustness of the Novy-Marx profitability factor, which is embedded in the Fama-French 5-factor. We also highlighted potential weaknesses in [...]
Long/Short Hedge Fund Factors: Low-Cost Downside Protection?
The holy grail of financial markets is finding strategies that have misaligned risk and reward characteristics. In the traditional view, investors try to do the [...]
The Philosophy of Value Investing — Reject “New Paradigm” Thinking
Every few years, people start to question whether value investing is dead. A recent Google search along these lines generated 3.1 million results: Likewise, people [...]
Trend Following the Greek Equity Markets
Long-Term trend-following saved the day in the Greek Equity markets... FTSE/Athens Stock Exchange Large Cap Index, which consists of 25 of the largest and most [...]
One Secret to More Creative Thinking? The Effect of Walking
Researchers at Stanford recently conducted a study that found that the physical act of walking improved creative thinking in subjects. We believe creative thinking is an [...]
High Dividend Stocks and Value Investing
Barron's recently ran an article (written by Research Affiliates), which is titled "Get Smart About Picking Dividend-Rich Stocks." The article highlights that high-quality high-dividend-paying stocks outperform [...]