Misconduct

A new paper was recently published titled The Market for Financial Adviser Misconduct by Mark Egan, Gregor Matvos, and Amit Seru.  It takes a deep dive into financial adviser shenanigans and quantifies everything from repeat offenders, to misconduct across firms, to the consequences of misconduct. This is a must read for anybody in the industry. Below…

What Is Gold Trying To Tell Us?

After a four and a half year bear market which saw the value of  gold fall by 45%, the precious metal enthusiasts finally have something to smile about. Gold is up over nine percent in February, its best month since January 2012. We’re always told that gold is a safe haven, so I wanted to…

Twitter Technicians

Technical analysts are dumb because they always change their mind. Fundamental analysts are dumb because they never change their mind. — Irrelevant Investor (@michaelbatnick) August 27, 2015 I obviously don’t think technical analysts are dumb because they change their mind, I was trying to encapsulate how some simply dismiss technical and fundamental analysis on Twitter….

What Happens To Stocks After They Make A Big Comeback?

The S&P 500 is now positive in February, after being down 6.7% earlier in the month. Although this slight gain can quickly evaporate- and has as I’m typing- I wanted to see if a theme emerged when stocks acted this way. Before diving into the data, what I guessed I might find was that this behavior…

The Divergence Of Small Value

When most investors think about different style boxes, whether it’s large cap growth stocks or small cap value stocks, they probably just take the label at face value. However, if you dig a little deeper, you’ll notice that just because funds share the same name, does not mean they are the same thing. In the…

Gratitude

As I roll out my new blog, I want to take a moment to say thank you to my readers. Words won’t do this justice, but I’d like to try and express my gratitude. Like everybody else, I’ve had some bumps along the way so I feel very fortunate to be here today. I’m doing…

The Noise Visualized

Since 2000, there have been 364 days when the S&P 500 has closed up or down by two percent. On average, this means one two percent move every 11 days. Below, the red dots represent every two percent day. The media loves these two percent days and Mr. Market is happy to provide them all…

Diversity In Your Portfolio

“Don’t put all your eggs in one basket” Many people in finance have an all or nothing mentality.  While it makes good sense for professionals to become ninjas in their respective discipline, for the laymen investor, this dogmatic thinking can be very dangerous. The professional investor who understands that their strategy goes in and out…

Do Strong Returns Follow Strong Returns?

Cliff Asness describes momentum as “the phenomenon that securities which have performed well relative to peers (winners) on average continue to outperform, and securities that have performed relatively poorly (losers) tend to continue to underperform.” Thanks to Asness and others, we know that momentum exists within individual stocks. What I wanted to see is if…

Indecision

Forgive me father, for I have data mined. I wanted to see what happened when the S&P 500 opened down 1.5% one day and closed up 1.5% the next day (which happened yesterday, and is possible today). My suspicion was that this might lead to higher returns in the very short term. This is not…