…today.” Volatility: IPS Strategic Capital head trader Patrick Hennessy notes the increasingly volatile behavior of the S&P 500 in recent years. “Historically,” he says, “it’s more likely to see this…
Search Results for: psychology OR behavior
Investing Lessons from the Best Poker Players
…Zollman says that investors dislike losing more than winning and are prone to what behavioral finance refers to as the disposition effect, which leads them to sell assets that have…
The Facts About Buybacks
…profit, this is certainly not the type of buyback I would want to see as an investor. How widespread this behavior has become is subject to debate, but there is…
Why Performance Chasing Can Be Perilous
…high expected returns.” Performance chasing is “as old as the hills” the article concludes, adding, “so this type of behavior is never going away.” The problem, however, is that “most…
Why is Warren Buffett Buying Bank Stocks?
…some quite aggressively. We very much like this behavior because we believe the repurchased shares in most cases have been underpriced.” The article concludes with comments from Wells Fargo Investment…
Is Yale's David Swensen Horrible for Investing?
…model entitled, Pioneering Portfolio Management, Swensen writes, “Even with adequate numbers of high-quality personnel, active management strategies demand uninstitutional behavior from institutions, creating a paradox few successfully unravel.” And while…
Challenging the Biggest Idea in Behavioral Finance
…place more weight on avoiding losses than accumulating gains–a central theory in behavioral finance—was challenged by a recent study that suggests “cognitive bias via loss avoidance doesn’t exist, and messages…
TV Ads and Stock Trading
A new study shows that TV commercials can have a real-time effect on investor behavior, according to a recent article in The Wall Street Journal. Researchers found that “TV ads…
Five Questions: Lessons From Finance History with Jamie Catherwood
…The discipline paid off. Jack: One of the most consistent things I have seen in looking at market history is the negative effect of investor behavior on returns. It seems…
Six Common Misconceptions About Factor-Based Strategies
…the efficient market hypothesis, then risk explains all the outperformance of factor models and if you aren’t, you may believe that there is also a behavioral explanation, but either way,…