Behavioral Finance


Oct

14

2015
Value & Momentum: The Odd Power Couple

Value & Momentum: The Odd Power Couple

Value and momentum are two well-known, empirically tested and accepted anomalies that exist across financial markets. Momentum Momentum is the belief that stocks or asset classes that have done well (or poorly) over a certain look back period (typically 12...

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Sep

23

2015
The Bear Market Paradox

The Bear Market Paradox

Michael Covel pointed out a great quote in a recent episode of his popular Trend Following podcast.  The quote came from a white paper authored by Graham Capital Management (emphasis my own): …“events” do not happen in a vacuum. They...

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Sep

11

2015
Stock Market vs Statistics

Stock Market vs Statistics

When the stock market is falling, you’ll hear lots of stories about the reasons “why”.  You’ll also hear a lot people say things like this: “This is an overreaction.  It is a buying opportunity.  The economy is fine.” Understanding that...

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Aug

25

2015
Worried About Your Portfolio?

Worried About Your Portfolio?

Over the past three days, stock markets around the world suffered big losses.  The S&P 500 corrected over 10% in a short period of time and headlines across the globe were loaded with stock market horror stories. What was the...

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Jun

25

2015
Irrational Value Opportunities

Irrational Value Opportunities

It is always interesting to watch how investors react to news events.  When presented with unexpected information, market participants are often hasty in their decision making.  Loss aversion and fear of missing out are two emotions that can drive this...

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