I got bounced the snippet below by a punter who had taken it from The Reformed Broker This particular punter has a penchant for anything that indicates that the market might be about to have a correction of any sort. As such they are drawn to this sort of analysis. The drivel about trailing PE’s…
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I am currently rereading Nate Silvers – The Signal and the Noise: Why So Many Predictions Fail – but Some Dont . It is a book that I consider compulsory reading for any trader. The first part of the book deals with baseball – a sporting endevour which lends itself to statistical analysis and which has seen…
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I have written often about how appalling the social sciences are at prediction and I include the financial markets within this soft science definition. The chart below shows that intriguingly this is not the case with other sciences – longer term weather forecasts are becoming more and more accurate. The interesting thing is that economists have…
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Interesting look at bubbles and the impact of timing upon them. Abstract: Investment manias and financial bubbles have likely existed for as long as humans have been involved in financial markets. In this research piece we take a look at some of the more famous market bubbles in history and the extreme volatility…
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In the circuitous way you often come to things I was looking at a collection of charts on base metals. As you can see from the screenshot below there really has been nothing to get excited about over the past few years, which puts lie to the notion of our supposed mining boom. What we…
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Financial research is highly prone to statistical distortion. Academics have the choice of many thousands of stocks, bonds and currencies being traded across dozens of countries, complete with decades’ worth of daily price data. They can backtest thousands of correlations to find a few that appear to offer profitable strategies. The paper points out that…
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According to the Sydney Morning Herald there has been an exodus of funds from large superannuation funds into self managed funds. The number of people with DIY super funds has grown by more than 30 per cent during the past five years to more than 1 million, collectively worth, in December last year, a whopping $568 billion.…
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As someone who comes from a data driven background one of the things that has always intrigued me about financial markets is that despite being a wellspring of raw data it is driven by narratives. Humans do seem to prefer stories over data – in effect we are a hairless ape that prefers stories to…
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This little piece interested me and I don’t have any real problem with its basic thrust which is that the financial planning industry is failing its clients in search of revenue. After all, this is an industry that lobbied hard not to be forced to act in the best interest of the client. However, my…
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