Feeds:
Posts
Comments

Archive for the ‘Behavioral economics’ Category

Uncommon lessons from Phil Fisher

Posted in About, Behavioral economics, Contrarian investment, Stocks, Value Investment, tagged , , on March 18, 2010 | Leave a Comment »

In the Introduction to my 2003 copy of Philip A. Fisher’s Common Stocks and Uncommon Profits and Other Writings, his son, Kenneth L. Fisher, recounts a story about his father that has stuck with me since I first read it. For me, it speaks to Phil Fisher’s eclectic genius, and quirky sense of humor:
But one night [...]

Read Full Post »

Dreaming of electric sheep

Posted in About, Behavioral economics, Quantitative investment, Stocks, tagged , on February 25, 2010 | 1 Comment »

One of the most interesting ideas suggested by Ian Ayers’s book Super Crunchers is the role of humans in the implementation of a quantitative investment strategy. As we know from Andrew McAfee’s Harvard Business Review blog post, The Future of Decision Making: Less Intuition, More Evidence, and James Montier’s 2006 research report, Painting By Numbers: An Ode To Quant, in context [...]

Read Full Post »

Walking the talk: Applying back-tested investment strategies in practice

Posted in About, Behavioral economics, Contrarian investment, Liquidation Value, Net Current Asset Value, Net Quick Stocks, Quantitative investment, Stocks, Value Investment, tagged , , , , , , , , on February 17, 2010 | 6 Comments »

Aswath Damodaran, a Professor of Finance at the Stern School of Business, has an interesting post on his blog Musings on Markets, Transaction costs and beating the market. Damodaran’s thesis is that transaction costs – broadly defined to include brokerage commissions, spread and the “price impact” of trading (which I believe is an important issue [...]

Read Full Post »

Three ghosts of bear markets past, redux

Posted in About, Behavioral economics, Contrarian investment, Greenbackd, Net Current Asset Value, Stocks, tagged on February 16, 2010 | 2 Comments »

Speculating about the level of the market is a pastime for fools and knaves, as I have amply demonstrated in the past (or, as Edgar Allen Poe would have it, “I have great faith in fools — self-confidence my friends will call it.”). In April last year I ran a post, Three ghosts of bear markets [...]

Read Full Post »

The Kabuki narrative

Posted in About, Behavioral economics, Liquidation, Liquidation Value, Net Current Asset Value, Net Quick Stocks, Net Quick Value, Stocks, tagged , , , , on February 12, 2010 | 5 Comments »

Regular readers of Greenbackd know that I’m no fan of “the narrative,” which is the story an investor concocts to explain the various pieces of data the investor gathers about a potential investment. It’s something I’ve been thinking about a great deal recently as I grapple with the merits of an investment in Japanese net [...]

Read Full Post »

The trend is your end.

Posted in About, Behavioral economics, Quantitative investment, Stocks, Value Investment, tagged , , on January 28, 2010 | 4 Comments »

In “Black box” blues I argued that automated trading was a potentially dangerous element to include in a quantitative investment strategy, citing the “program trading / portfolio insurance” crash of 1987. When the market started falling in 1987 the computer programs caused the writers of derivatives to sell on every down-tick, which some suggest exacerbated the crash. Here’s New [...]

Read Full Post »

The New Yorker on Richard Thaler

Posted in About, Behavioral economics, Stocks, tagged , on January 25, 2010 | Leave a Comment »

The New Yorker has John Cassidy’s interview with Richard Thaler, Chicago School economist and co-author (along with Werner F.M. DeBondt) of Further Evidence on Investor Overreaction and Stock Market Seasonality, a paper I like to cite in relation to low P/B quintiles and earnings mean reversion. Thaler is also the “Thaler” in Fuller & Thaler Asset Management, which James [...]

Read Full Post »