Fitch Ratings' US credit downgrade highlights a latent principal–agent problem in modern financial markets: Investors have outsourced much of their risk management to the rating agencies.
"There’s one aspect of MMT that I have some sympathy for: the notion that what we spend money on is far more important than how we finance it." — Cliff Asness
Does the equity risk premium (ERP) vary depending on the term structure? Does reversion to the mean dictate that it will decrease the longer the time horizon?
"If we thought of the equity premium as a fear premium," Rob Arnott says, "a lot of the so-called anomalies that we’ve talked about would not be anomalies at all."
Since its launch in 2011, Enterprising Investor has showcased the scholarship of behavioral finance’s top luminaries as well as its critics.