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Monkeys can throw darts at stock quote pages of newspapers. Is long-only momentum better than the monkeys? In his best-selling book A Random Walk Down Wall Street, Burton Malkiel claimed that a monkey wearing blinders and throwing darts at a newspaper’s ...

Passive investors in equities are trend followers who do not try to minimize drawdowns with tactical models. In the realm of investing, the majority of concepts are based on convention, much like in science. Objectivity about definitions and rules is more ...

Attempting to enhance outdated investing or trading strategies and ideas that have not yielded expected results is rarely successful due to data snooping. It is tempting—so tempting that even people who understand the dangers of data snooping cannot escape it. Data snooping ...

With the advent of portfolio backtesting software and platforms, in the last few years there has been a proliferation of equities momentum strategies with very attractive backtesting metrics. In this article, we focus on some of the issues and present ...

Superoptimism is a behavioral bias due to many causes, most of which are either unknown or difficult to identify. Avoiding superoptimists should be part of risk management in every aspect of life, including the markets. Lately, we see many superoptimists: ...

Using delisted series from Norgate Data, we analyzed the impact of Dow-30 stocks on an equity long-short trend-following strategy for the S&P 100 constituents. Suppose we want to determine whether, excluding Dow-30 stocks, a long-short equity trend-following system with the S&P ...

After a long period of higher interest rates, the Fed surprised with a 50 basis points cut. It is now time to review interest rate volatility and its implications. After an extended period of 0% interest rates and quantitative easing due ...

Trying to understand how the economy works for investing in equity markets is a difficult task that can lead to failure. Smart investors take the beta with minimal effort. Here is an example. Everyday, there are thousands of posts on financial ...

How long of a track record is required for determining if a fund manager or trader is skilled? The answers may surprise you. In a recent Meb Faber podcast with professor Kenneth French, there was an intriguing discussion about skill vs. ...

For retail stock market investing, understanding the macroeconomic environment and the actions of the central banks is not required. Relying on macroeconomic analysis is difficult due to the subject’s complexity. Macroeconomic analysis is a fascinating area with conflicting opinions. The sample ...