Value investors understand better than many that differences between ‘should-be’ and ‘are’ stock prices can be large and persist for very long periods, Keynes noting famously in the 1930s ‘The market can stay irrational longer than you can stay solvent”. The solve-for-y of these discrepancies is flows. With this in mind researchers Xavier Gabaix and […]
Author: Nial Gooding
Previous studies have highlighted negative effects of the growth of passive investment, especially index tracking ETFs, in recent years. In addition to increasing market volatility ETFs have been shown to lead to lower price efficiency, higher return synchronicity and less analyst coverage of securities in underlying baskets. Researchers from the University of Utah wanted to […]
[A quick tutorial for lay readers. ‘Smart-beta’ is the idea there are recurring patterns in markets, or factors, that professionals use to gain advantage. By automating the application of these factors passive investors, perhaps via an ETF, can obtain some of the same advantage when investing. For example: growth, value or momentum. Just let machines […]
We all know the story. America allowed China Permanent Normal Trade Relations (PNTR) status in 2000 which in turn led to China’s accession to the WTO. This in turn led to a ‘China Shock’ to American manufacturing destroying millions of blue-collar jobs whilst the Washington elites and their friends reaped the benefits. This then led […]
The housing market in the U.S. is in rude good health as figures released last week show U.S. housing market. This may have something to do with government transfers in recent months? This is almost certainly not an outcome planners were aiming for. The paper highlighted today reminds policymakers there’s a more effective way to […]
Pity regulators. Well, not so much perhaps. When markets are volatile, especially when they’re going down, a notion develops that ‘authorities should ‘do’ something’ and governments are often persuaded to step in. In many cases this has meant to either halt trading or slow it down. The academic literature is divided on whether this is […]
Dan Ciuriak writing in a Policy Brief for the Asia Pacific Foundation of Canada makes three important points about the early onset of the COVID-19 pandemic: There was no global information asymmetry as early as December 31st 2019. The world knew as much as China did at that point Information available on that date was […]
Mr. Jack Ma has form in terms of rearranging parts of his empire on terms not wholly to the liking of other interested parties Yahoo 2011 Spat; but investors seem not to care about past events, especially if they believe they’re still on a profitability-rocket-ship-to-God. The paper highlighted today is a detailed study that every […]
In the United States there’s been an escalation of hate crimes directed at Asians during the course of the COVID-19 pandemic. Runjing Lu and Yanying Shen from the universities of Alberta and California San Diego respectively have analyzed Google searches and Twitter posts to see if an increase in the use of a certain racial […]
[The work in the paper highlighted today from Huanchang Du (et. al.) of Princeton is important for practitioners but, for the sake of brevity, I’ll address only the laity in the summary. There’s a link at the bottom if you need the deeper dive.] If a stock is priced at $100 and has a dividend […]
Writing in a regular publication of the Centre For Economic Policy Research Muhammad A. Cheema (et. al.) of the University of Waikato, N.Z. took a look at the performance of so-called ‘safe haven assets’ over the recent COVID-19 (C-19) related stock market kerfuffle(s). Others have done similar analysis but what makes this work different is […]
The study in the paper linked to at the bottom of this note claims to be the only one of its kind to longitudinally study the Chinese public’s approval over time (since 2003) of the Chinese Communist Party (CCP). It came out in July this year and got respectable coverage from China-centric news-mongers but received […]
A quick history lesson if you’re unfamiliar with Baoneng or Vanke. In 2015 Baoneng, a Chinese insurance company of dubious pedigree controlled by Mr. Yao Zhenhua, began buying shares in one of China’s largest property companies Vanke. The company at the time was de facto controlled by China Resources and Vanke’s then Chairman Mr. Wang […]
The paper highlighted today from Jahidur Md Rahman and Fang Yu, both from the Wenzhou-Kean University, claims to be a first. Research elsewhere in the world has produced mixed results on whether or not an attention to Corporate Social Responsibility (CSR) results in higher profits, or not; but in this study of A-share listed Chinese […]
Deniz Anginer from the Simon Fraser University (et. al.) in Canada took a look at corporate insiders’ dealing from January 2017 to April 2020 to see if this activity can predict how COVID-19 might affect the longer term economic performance of economies in which these managers operate? They studied individuals in the U.S., Canada, China, […]
I settled the gold (to hold or not) argument some time ago and the answer is simple. As with any other financial asset the decision should be based on your circumstances. For me therefore I don’t think it’s appropriate; but for you? It might be. As the paper highlighted today notes in a quote from […]
People who don’t allow their children to be vaccinated are doing them a great dis-service. Unvaccinated children have poorer life outcomes, get sicker, earn less money and have poorer cognitive ability in old-age than peers. Writing in a Working Paper for the National Bureau of Economic Research Hamid Oskorouchi et. al. provide (yet more ) […]
More a monograph than a paper highlighted today from Zara Kakushadze and Jim Kyung Soo Liew in which they put forward an incredibly simple idea. One who’s time appears to have been at hand for some time but one COVID-19 might hasten into reality. Money is dirty the researchers point out. Not just in a […]
On June 7th The State Council Information Office of the People’s Republic of China published Fighting Covid-19 China in Action (click the link to get to the full text). A 66-page ‘White Paper’ it aims to: a) set the record straight on how China initially communicated it’s COVID-19 problems to the world and, b) provide […]
The clear skies many cities have enjoyed thanks to an economic slowdown forced by COVID-19 responses has led to fresh discussions about the need to stop burning ‘stuff’ to satisfy our energy needs. Samantha Gross, an engineer by training and a fellow in the Foreign Policy program at Brookings (the non-partisan Washington based think-tank), weighs […]