Investing Research Articles

…neither bullish nor bearish candlestick signals reliably generate abnormal returns in the expected direction for large-capitalization U.S. stocks during recent years.

How does “the group that is arguably best qualified, finance professors, …assess the importance of valuation techniques, asset-pricing models, market anomalies, firm characteristics, corporate events, seasonal variables, and other information” when they invest for themselves? In their April 2007 paper entitled “What Really Matters When Buying and Selling Stocks?”, James Doran and Colby Wright seek… Keep Reading

…investors have expected a fairly stable value premium of about 6% per year over the past 60 years, derived mostly from growth in dividends.

…there is considerable redundancy and invalidity among the many factors used to explain differences in returns among individual stocks. Three factors may be necessary and sufficient, with liquidity the most influential.

…investors systematically overvalue (undervalue) stocks when they expect earnings per share to be low (high). Their expectations exhibit conservatism bias with respect to both the downside and upside extremes.

…status may be more powerful than wealth as a motivator, with significant implications for investor/trader behavior.

…earnings acceleration helps explain stock returns, most notably when it amplifies the direction of earnings growth (both positive or both negative).

…there is a tendency for stocks worldwide to reprise their monthly return behavior every 12 months, with intracycle reversals, over periods of many years. Results suggest calendar-connected market structures.

…a small-stock buy-and-hold approach benefits fully from upside volatility (beta) but does not suffer the entire penalty of downside volatility.

Are stock market forecasters prone to hyperbole? Is there logic to predicting plunges and melt-ups at probabilities unjustified by rigorous empirical analysis? In their February 2007 paper entitled “Probability Elicitation, Scoring Rules, and Competition among Forecasters”, Kenneth Lichtendahl, Jr. and Robert Winkler apply game theory to model the behavior of forecasters who pit themselves not… Keep Reading