Philip Tetlock, who teaches psychology, business and political science at the University of California, Berkeley, is also the author of “Expert Political Judgment: How Good Is It? How Can We Know?” The book, which was published in 2006, discusses the findings of his 20-year study, the first scientific study on the ability of experts from…
There has been a great deal of focus by the academic community in recent years on fine-tuning the various factor models used to explain the differences in returns of diversified portfolios. Marie Lambert, Boris Fays and Georges Hubner contribute to the literature with their 2015 paper, “Size and Value Matter, But Not the Way You…
Is it time for stock-pickers to make a comeback? That was the topic of discussion during a recent Trading Nation segment in which CNBC’s Brian Sullivan interviewed Stacey Gilbert of Susquehanna, and Phillip Streible of RJO Futures. Gilbert and Streible made the case that because the correlations (a measure of the strength of the linear…
Risk-based asset pricing theory suggests, simply, that assets bearing a higher risk should compensate investors with higher returns. While most papers investigating the risk-return relationship of assets are focused on equity markets, surprisingly few studies explore this phenomenon in currency markets (which are among the deepest and most liquid markets in the world). In fact,…
Remember how you felt during the financial crisis in 2008? People were scared. Even the professionals were uncertain about what might happen. I know, because I was scared, too. But I couldn’t show it. Whatever was going on, my clients still needed me to provide thoughtful advice and to help stop them from doing something…
Brian Haywood Nobody really knows exactly when, or by how much, interest rates will rise. But that likelihood is already priced into the market. Director of Fixed Income Brian Haywood on what you need to know if they do, and why sticking to your strategy will pay off in the end. Waiting for Interest Rates…
Bloomberg TV recently invited me on to their new show, Bloomberg GO, for a short debate with David Barse, CEO of Third Avenue Management, on active versus passive investing. After stating that funds offered by Third Avenue, which have more than $8 billion in assets under management, had been able to beat their index benchmark,…
Almost 10 years ago, I knew a guy on a financial rocket ship. He had a great house, a successful business and a solid income. But then things changed. With the benefit of hindsight, it was clear he bought a little too much house and spent a little too much money. At the beginning, he…
The current controversy over the proposal by the U.S. Department of Labor to impose a fiduciary standard on those who advise retirement plans has little to do with the rule’s merit. Rather, I believe it’s at issue because stockbrokers are the beneficiaries of a cozy system that permits them to have conflicts of interest which…
A regular reader of my articles contacted me recently to discuss current valuations and a value-oriented strategy. He observed: “It doesn’t matter which approach you like: a value investor doesn’t prefer U.S. stocks now.” He also pointed out that, while the MSCI World Index currently contains 58.6 percent U. S. stocks, the iShares MSCI World…
While it’s a low bar, Bloomberg TV always seemed to me to be the best of the financial media. Its anchors are professional and knowledgeable. Its coverage is broad and responsible. It avoids the hype and sensationalism typical of many of its competitors. Bloomberg recently launched a new morning program, Bloomberg Go. It features some…
When we talk about the chances of something bad happening, people tend to fall into three general groups. ■The Numbers Don’t Matter No matter the odds, this group dismisses the statistics. People insist they can trust their gut. I suspect this group buys lottery tickets every week. Read the rest of the article on The…
Blerina Hysi, Fixed Income Portfolio Advisor, BAM Advisor Services Laddered bond portfolios can be customized to meet each investor’s unique needs. Plus, they help reduce the risk associated with investing in fixed income. Fixed Income Portfolio Advisor Blerina Hysi on the benefits of a well-structured bond ladder. Quick Take: What is a Bond Ladder from…
Behavioral economist Richard Thaler explains why financial professionals need to be familiar with psychology. Daniel Kahneman and Amos Tversky legitimized behavioral economics—the study of how people really behave around money, as opposed to how economists say a rational person ought to behave. Then Richard Thaler and Cass Sunstein applied the lessons of behavioral economics to…
While the debate over the merits of active versus passive investing is ongoing, there has been a very clear trend spanning several decades now showing that investors are slowly (but steadily) abandoning the hope of outperformance offered by active management in favor of the certainty of earning market returns (not average returns) offered by passive…