This series of articles was authored to point out some of the often hidden, unrecognized, ignored, or forgotten assumptions underlying the functioning of markets in capitalism. Additionally, ways in which markets fail in their intended purpose also feature prominently.
Markets frequently fail, despite their pristine reputation among capitalists. One way is the many actions taken by buyers and sellers to tilt a transaction in their favor. These visible hands create asymmetries between the parties. Jason Voss, CFA, explains.
Markets are usually not systemic. Instead, from the bird’s-eye perspective of "Capitalism," many businesses are "opportunities" in the same way that it feels good to hit yourself in the head with a hammer: It's much better once you stop.
Markets are useful but imperfect, says Jason Voss, CFA. One imperfection is that they assume fungibility. Assuming that a dollar spent on one thing is equivalent to a dollar spent on something else has serious consequences for investors.
Markets assume a context entirely out of view of their participants, which can have deleterious effects for both suppliers and demanders, Jason Voss, CFA, observes in the latest installment of his Where Markets Fail series.
Markets are useful, but imperfect, Jason Voss, CFA, explains in the first installment of his Where Markets Fail series. One glaring flaw is their inability to discount the future. This results in many deleterious and often long-term consequences.
Subscribe to Enterprising Investor and receive the weekly email newsletter.
American Century Investments has brought to Cboe Global Markets two actively managed nontransparent exchange-traded funds that disclose portfolios quarterly, rather than daily. The American Century Focused Dynamic Growth ETF buys shares of early-stage companies with rapid growth, while the American Century Focused Large Cap Value ETF targets high-quality large-cap companies in the Russell 1000 index that are undervalued. ETF Trends (02 Apr.)
The European Central Bank has extended the period for reviewing monetary-policy strategy to mid-2021 because of the coronavirus pandemic. The ECB has also delayed the Forum on Central Banking to Nov. 10 to 12. Global Investor (subscription required) (02 Apr.)
The Federal Reserve's policy of directing liquidity initiatives at investment-grade and government debt risks creating a $9 trillion pool of "orphan" issuers, such as heavily leveraged companies, that do not qualify for relief. The policy could hurt otherwise creditworthy issuers, says Roberto Perli of Cornerstone Macro. MarketWatch (02 Apr.)
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.