Practical analysis for investment professionals

equities


Take 15: The Value of Constructive Dissonance (Video)

John Linehan, CFA, head of U.S. equities and portfolio manager at T. Rowe Price, describes his firm’s investment philosophy and the value of “constructive dissonance,” and discusses why maintaining a global perspective is more important than ever.

Does the US Presidential Election Impact the Stock Market?

Here's a quick summary of some of the most recent research on how presidential politics impacts equities.

Fact File: S&P 500 Sigma Events

A seemingly endless battle is waged between believers in the efficient market hypothesis, such as Eugene Fama, and believers in behavioral finance, such as Daniel Kahneman. Regardless of your perspective, an analysis of the S&P 500’s history of sigma events provides an interesting field for the battle to be waged.

Take 15: Investing Globally: The Rise of the Middle Class

John P. Calamos, Sr., discusses the rise of the middle class in emerging markets and what investors in these markets should focus on.

13F Watch: Bullish on Consumer Staples and Health Care Stocks, Bearish on Technology and Energy

Based on a review of the aggregate filings for the second quarter of 2012, institutional investors added to their holdings in consumer staples and health care stocks while reducing their exposure to the technology and energy sectors.

Poll: Are High-Frequency Trading Reforms Needed?

In a poll conducted earlier this week, CFA Institute asked its members if tighter regulation of high-frequency trading would meaningfully reduce technical glitches in the stock market. Not surprisingly, nearly two-thirds of respondents thought that tighter regulations would indeed be effective.

Silver Medal or Bronze? Understanding Pride, Regret, and Counterfactual Thinking

Due to a phenomenon known as counterfactual thinking, silver medalists are often less happy than Olympians who capture the bronze. Studies show that counterfactual thinking can also influence how finance professionals pick stocks.

Reformed Broker: Five Reasons We Hate the Stock Market (And One Reason Why It’s No Sign of a Bottom)

Well-known blogger Joshua Brown, a.k.a The Reformed Broker, recently offered five reasons why Americans are fleeing the stock market. While he makes some sound points, he neglected to account for one key factor affecting stock market performance in the last few decades: the bubble in demand for equities created by Baby Boomers.

Take 15: ROE: The Wrong Performance Measure for Banks

Robert Jenkins, FSIP, cites the flaws in the traditional return on equity (ROE) measure in measuring bank financial performance and proposes some much needed alternatives.

Book Review: Super Sectors

This book provides a highly accessible and pragmatic approach to the subject of investment vehicles. For the relative newcomer to active investing, it offers several nuggets of useful information. For veteran system developers interested in further honing their trading acumen, it serves as a refresher of key concepts.



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