Expected Wave of Corporate Failures Stays at Bay

As the coronavirus crisis continues to affect U.S. companies and trigger defaults and bankruptcy filings, a recent article in The Wall Street Journal reports that, for the most part, “the companies that have succumbed were already heavily indebted and in industries that were declining before the pandemic.” The hit to the top line due to the shutdown, the article says, “tipped them over the edge.” The outlook for healthier companies, however, has “brightened considerably over… Read More

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 channeling their data-mining smarts to the world of clinical sciences to model the trajectory of this once-in-a-century pandemic,” the article says. A team of data scientists at  the Australian credit fund Coolabah Capital, for example, developed a proprietary model (based on regression analysis) to map… Read More

Long-Term Coronavirus Damage Must Be Reduced by Fed

In a new series on the “economic cures” for the coronavirus, the Financial Times is offering insights from leading commentators and policymakers on “how to alleviate a devastating global slowdown”. This article, co-authored by Ben Bernanke and Janet Yellen, discusses the role the Fed must play to reduce long-term damage. Here are highlights: The Fed’s recent actions of lowering interest rates (to nearly zero) and preparing to purchase $700 billion in Treasury debt and mortgage-backed… Read More

Daniel Crosby The Behavioral Investor Investor Psychology

Excess Returns, Ep. 21: Interview: Psychology and COVID-19 with Dr. Daniel Crosby

In this week’s episode we shift gears a little from our usual investing focus. We wanted to spend some time talking about the current COVID-19 crisis and its impact on all of us as people. To do that, we brought in an expert of human psychology and behavioral finance, Dr. Daniel Crosby. Daniel is the author of the Behavioral Investor and the Chief Behavioral Officer at Brinker Capital. In the interview, we discuss: What we… Read More

A Look at the Impact of COVID-19 on Value Investing

By Jack Forehand, CFA On the surface, value investing is pretty simple. As a value investor, I want to buy stocks at a discount. I want to look at a company’s price relative to what I think it is worth, and I want to build a basket of stocks where I think that discount is greatest. In theory, the calculation of what a company is worth is a complicated process that involves projecting its cash… Read More