The basic theory of multi-factor investing is pretty simple. It has been widely proven that factors like value and momentum can outperform the market over long periods of time. But…
CalPERS’ Untimely Tail-Hedge Unwind: The Inside Story
After “cutting its crash-hedging program as part of a cost-curtailment effort and because of a lack of understanding of how tail hedges work,” the California Public Employees’ Retirement System (CalPERS)…
The Reason for Bear Market Rallies
A recent article in Forbes offers perspective on bear market rallies and why they occur, drawing on historical data going back to the 1930’s. “One question I often get from…
The Virus Fight and Wall Street Quants
A “motley crew of quants” is taking the virus fight to a whole new level, according to a recent Bloomberg article. “Hedge fund managers, market academics and risk experts are…
Whether to Wade in or Dive in on Buying Stocks
The question faced by investors interested in buying stocks right now is whether to dip in a toe or dive in headfirst, and the answer depends on market volatility and…
Bonds Versus Stocks: Question Everything You Know
As of the end of March, bonds had outpaced stocks over the last twenty years, according to a recent Bloomberg article by columnist Nir Kaissar. “While everyone was consumed with…
Amid Tumult, Renaissance Medallion Fund Gains 24% to Date
Jim Simon’s Medallion hedge fund was up nearly 10% in March alone and 24% so far this year as global stock markets have pummeled amid the coronavirus pandemic. This according…
Seven Mind-Blowing Charts from the COVID-19 Crisis That Deserve Your Attention
By Justin Carbonneau (@jjcarbonneau) They say a picture is worth a thousand words. The pictures and charts outlined below may actually be worth much more: 30 million unemployed.$7 trillion on…
Excess Returns, Ep. 22: A Look at the Impact of COVID-19 on Value Investing
The process of using past fundamentals to try to predict future prices has been in place for a very long time, and there is substantial academic evidence to support it.…
Behavioral Finance and How to Avoid Making Poor Investing Decisions
In a recent episode of the Validea podcast Excess Returns, Justin Carbonneau and Jack Forehand had an in-depth discussion about the coronavirus pandemic with Daniel Crosby, Ph.D., chief behavioral officer…