Browsing: behavioral finance

Posts Tagged ‘ behavioral finance ’

The New Generation of Behavioral Finance

Nov 26th, 2020 | Filed under: Newly Added, Risk management, Asset allocation, Behavioral finance, Socially responsible investing, Asset Allocation Models, ESG, Economics, Risk Management Strategies & Processes, Hedge Funds, Macroeconomics, Finance & Economics

Meir Statman, a professor of finance at Santa Clara University and a consultant to Avantis Investors, has focused his scholarly efforts for decades on behavioral finance, and those efforts have given us a recent book on the subject, Behavioral Finance: The Second Generation. In Statman’s view the first generation ofRead More

Taleb: What Size Tail Does the Smart Money Bet On?

Jan 28th, 2020 | Filed under: Financial Economics Theory, Newly Added, Risk management, Behavioral finance, The A.I. Industry, Risk Management Strategies & Processes, Machine Learning, Finance & Economics, Other Topics in A.I.

Statistician/philosopher Nassim Nicholas Taleb critiques “behavioral” economics and finance as he looks at the differences between “binary forecasts” and “real world payoffs,” in a recent paper for the International Journal of Forecasting. Much of the argument will be familiar to those who have some acquaintance with Taleb’s work as itRead More

Trust Isn’t Just a Nice Warm Feeling

May 10th, 2016 | Filed under: Financial Economics Theory, Newly Added, Behavioral finance, Finance & Economics

Ross Levine, professor of finance at the University of California, Berkeley, and two scholars from Hong Kong (Professors Chen Lin and Wensi Xie) have published a study of corporate resilience in the face of a banking crisis. Their paper addresses a problem inherent in the relationship between Wall Street andRead More

Cause and Effect: Or, Shooting the Messenger

Aug 27th, 2015 | Filed under: Media Coverage of Hedge Funds, Behavioral finance

Not even Schrodinger blamed the reporters for market irrationality. Saying out loud, "Hey, this cat is dead," doesn't kill the cat. Read More

Hedge vs. Mutual Funds and the ‘Timing of Information Acquisition’

Oct 28th, 2014 | Filed under: CAPM / Alpha Theory, Behavioral finance

A new paper by a scholar at the McCombs School of Business looks at what causes what on Wall Street, starting with how (if at all) analyst downgrades cause price declines. Read More

Hong Kong Shariah-Compliant Launch Sells

Sep 22nd, 2014 | Filed under: Behavioral finance, Emerging markets

If I should declare that I will never eat duck, and then I simply re-name certain ducks “chickens” and eat them, then people who genuinely as a matter of principle refuse to eat duck may consider me a false friend. And those who have no objection to the eating of duck may think me a silly goose. Read More

Time Flies and Statistics Lag: Thoughts on Factors

Aug 14th, 2012 | Filed under: Behavioral finance

Clifford Asness and Andrea Frazzini show that an important detail in the way scholars go about studying factor pricing and behavioral finance is seriously flawed. The detail in question dates to an influential paper by Eugene Fama and Kenneth French, "The Cross-Section of Expected Stock Returns," (1992). Read More

Efficiency May Be Special Case of Adaptation

Apr 24th, 2012 | Filed under: Hedge Fund Strategies, Alpha Strategies, Behavioral finance

In a new paper, Andrew Lo has educed from his Adaptive Markets Hypothesis five practical conclusions, among them that during times of crisis, the usual positive relationship between risk and return may not hold. There is in general a "time-varying and often negative relationship between the two." Read More

What Were They Thinking? From MF Global to Raj & Bernie to LTCM…

Feb 7th, 2012 | Filed under: Hedge Fund Operations and Risk Management, Risk management

The right question is not what were they thinking, but what were they feeling? Get organized about detailing what feelings are being acted out and you’ve landed on the missing link in risk prediction.Read More