In 2012 we published a whitepaper entitled “Adaptive Asset Allocation: A Primer” in which we built upon the simple, robust momentum framework proposed by Mebane Faber in his 2009 study “Relative Strength Strategies for Investing.” Our approach utilized a …
Keep ReadingHuman Behavior
Bernanke & Citadel, Politicians & Priests
There’s been much made of the recent move by Ben Bernanke accepting a position – less than a year after leaving his position as Chairman of the Fed – with hedge fund Citadel.
Keep ReadingPete Carroll Is Not the Fool, I Am
Abundant ink has been spilled on the subject of Pete Carroll’s decision to pass on 2nd down from the 1 yard line in the Super Bowl two Sundays ago. Some have come out and bombastically stated that it was the WORST CALL IN SUPER BOWL HISTORY!! Others have concluded that, in fact, Carroll was entirely justified in the decision he made.
Keep ReadingSNB, CHF and Our Colleague…
The Swiss Franc (CHF) was the talk of the financial world last week. We feel compelled to write something about it, but our response will be measured because we know someone directly affected by the situation. You see, we have this colleague…
Keep ReadingThe Ever-Depressing SPIVA: 2014 Mid-Year
The Mid-year S&P Dow Jones Indices SPIVA Canada Scorecard is out, and it’s everything that we’ve come to expect from the discretionary stock-picking world. But this time was unique even by our standards in that, for the first time in memory, not a single Canadian Dividend & Income equity fund outperformed it’s benchmark over the last 5 years.
Keep ReadingWhy Monkeys Hate Losing Grapes and You Hate Losing Money
In a famous experiment popularized by the the 2009 book SuperFreakonomics, Dr. Keith Chen conditioned Capuchin monkeys to understand the utility of money to purchase treats. It was compelling enough that the monkeys showed demand elasticity – they bought less of certain treats when prices rose and more of other treats when they fell – but the real breakthrough was when the researchers introduced two gambling games.
Keep ReadingDon’t Invest in What You Know
It’s common market wisdom that non-professional investors should “invest in what you know.” This makes intuitive sense, since we obviously have an informational edge in sectors that we work in. Furthermore, it’s scary and requires extra effort to investigate areas of the market in which we have no experience.
Keep ReadingHow to Waste a Ton of Time on Unimportant Decisions, Part 2
Wasting time is the bane of our existence. We’re not talking about laziness or procrastination; that’s a completely different thing. What we’re talking about is Fredkin’s Paradox and the human condition that requires decisions be “informed” even in circumstances where:
Keep ReadingHow to Waste a Ton of Time on Unimportant Decisions, Part 1
I spent an hour this week trying to decide whether to start Brian Quick or Jay Cutler in my fantasy football league. If you don’t know who those players are, that’s fine because it doesn’t matter. What matters is that Quick was projected to score 12.38 points and Cutler was projected to score 12.41 points.
Keep ReadingRepeated Games & Airline TV
Pricing models are something that have long fascinated us. So compelling is the topic that it’s a well known form of entertainment amongst economists to try and decipher how businesses set prices. This is especially fun when there’s a good reason to think that there might be something unintuitive and more interesting than simple supply and demand.
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