Investing Research Articles

…stocks of firms with high ACSI customer satisfaction ratings outperform the market on average over the long term. Said differently, investors appear to undervalue customer satisfaction systematically.

…share repurchase announcements are now more reliable indicators of actual buyback activity, and consequent beneficial impact on earnings per share, than they were before 2004.

As suggested by a reader, we evaluate here the Trading Wire archives at Tobin Smith’s ChangeWave, which extend back to November 2004. Tobin Smith, according to ChangeWave.com, is “among an esteemed new breed of investment advisors, with a fresh profit strategy for the post 2000-2002 bear-market investing world. He’s an energetic straight shooter with a… Keep Reading

Do companies famously known as good places to work outperform as investments? Or, contrarily, do they waste resources keeping employees happy? In his May 2007 paper entitled “Does the Stock Market Fully Value Intangibles? Employee Satisfaction and Equity Prices”, Alex Edmans analyzes the relationship between employee satisfaction and long-term stock performance. He identifies companies with… Keep Reading

…there is a highly significant value premium among Australian stocks, and the book-to-market ratio is the best way to capture that premium. A size effect exists only among the very smallest stocks.

…investors should perhaps lean toward stocks (real estate) when the electorate leans to the right (left).

…there is no evidence of any systematic intraday inefficiencies in SPDR data.

…the most liquid stocks on average outperform, and this liquidity effect may be central to the value premium.

Stocks with high historical volatility should produce high returns as reward for extra risk. Shouldn’t they? In the April 2007 version of their paper entitled “The Volatility Effect: Lower Risk without Lower Return”, David Blitz and Pim van Vliet examine the relationship between long-term (past three years) historical return volatility and risk-adjusted return for stocks… Keep Reading

Does the head-and-shoulders stock price pattern embody investor attitudes that traders can exploit to earn abnormal returns? Or, does it represent an opportunity for the statistics-challenged to be fooled by randomness? In their October 2006 paper entitled “The Predictive Power of ‘Head-and-Shoulders’ Price Patterns in the U.S. Stock Market”, Gene Savin, Paul Weller and Janis… Keep Reading