Jumping At Shadows

I was reviewing the latest Investment Trends data which can be viewed here. There are a few things that jumped out at me but I want to discuss the chart I have posted below. This chart looks at the current fears investors/traders have about the market. What is interesting about these fears is that as…

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CEO Salaries

Whilst looking for something completely different I came across this list of domestic CEO salaries. I thought it would be interesting to strip out some of the data and look at those CEO’s who are paid the most but whose companies lose the most money. Its remarkable how well you can do when your company…

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Closing the gap between behavioral science and business

It is a strange time to be a behavioral scientist in business.  When I left my PhD program almost ten years ago to focus on real-world applications, I spent the majority of my first few years explaining over and over what behavioral scientists actually did.  Now, I regularly get inbound requests to speak at large…

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Momentum overpowers value investing in Aussie market

This piece in the AFR is currently doing the rounds with various people trumpeting that this is what they do so they are a genius. To be fair without actually seeing the original Morgan Stanley report or understanding what they did any comparison between different methodologies is profoundly limited in its utility.  

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Where Is The Money?

One of the frustrating things about being a trend follower is that it takes time to overcome the inertia of a new system, particularly if that system is based upon slightly longer time periods such as weekly data. Part of the frustration that traders encounter is based upon the simple mechanics of how systems work.…

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GBP Flash Crash Investigation Report

On October 7th 2016 the GBP suffered a minor aneurysm and dropped like a stone for a short period of time as seen below. The Bank of International Settlements had just released a report into possible reasons for the crash. You can download the full report here.  The executive summary  outlines a constellation of  reasons…

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More On Being Wrong

There’s an academic I know — very well respected — who especially values one of his collaborators. This particular colleague isn’t invaluable because of his creativity or intellect, says my professor friend, but because “he is willing to tell me when I’m wrong, and that’s rare”. It is indeed rare. Perhaps even rarer is the…

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Gold Vs S&P500

I am still intrigued by the US markets reaction to the results of the US election when viewed in tandem with an instrument such as gold which is generally seen as a hedge against uncertainty (in this instance read outright dickheadedry) As such I though I would look at the relative returns of both instruments…

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Why Not To Listen To The Media And Brokers

A comment appeared in relating to this piece I wrote the other day and it deserves a fuller explanation. I will state at the outside that it is my contention that if you listen to the financial media and the sell side of the finance industry you will never get anywhere. And as a first…

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FX Correlations

A question popped up in the Mentor Program that related to what to do when related instruments all gave the same signal, in this instance the culprit was various JPY related pairs. I had not looked at FX correlations for awhile so thought I might stick a few together and see if they told me…

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Once Upon A Time

Sometimes I feel sorry for traders/investors who need to construct a narrative as part of their investment process. Whilst you are cocooned inside your own delusional story you would never know whether your story is the right one and is the one the market has chosen. As an example consider the year to date moves…

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Advice On How To Go Broke

This is an early contender for the worst piece of financial advice of the year. My advice… exactly the opposite. The financial press Whether you decide to be a “passive” investor, and put all your money in index funds, or you choose to be an “active” investor, and trade the market, you should know where…

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