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15
FEB
2016

Upside Down World – Buying Equities with a High P/E Ratio i.e. Herding, Not a Good Strategy

For many investors, the most commonly used method of stock valuation is the Price to Earnings multiple or the PE ratio. The current market price divided by the latest earnings per share of the company in question gives us the PE multiple for the stock. From a historical...
13
FEB
2016
My Delema

A Prospect Theory Dilemma – “I Face It Today”

Recently I have had the delightful task of presenting my short talk on behavioural finance to professionals up and down the country. The talk has the catchy title: Bulls, Bears – We Are All Sheep. It is a lunchtime, one hour presentation which I have been giving recently to...
13
FEB
2016

Tom DeMark Calls For a Stock Market Market Bottom Right Now

In a Bloomberg TV Interview last week Tom DeMark calls for a market bottom in the next 2-3 market days.  He is not a man to mince his market calls. He does not get it right every time but some of his calls have been simply spectacular.  I’ve known Tom for many years and can...
10
FEB
2016
Rick Bensingor

Conformational Bias in Portfolio Managers – a Rant

Confirmation Bias, is the tendency to search for, interpret, favor, and recall information in a way that confirms one’s beliefs or hypotheses, while giving disproportionately less consideration to alternative possibilities. I have seen this in research pieces put out by...
08
FEB
2016

Where Have All the FX Traders Gone?

FX trading in the U.K. and North America shrank by more than 20 percent in October from a year earlier, according to central banks in those regions. London is the biggest centre for foreign-exchange trading. The investment banking business has shed tens of thousands of positions...
08
FEB
2016

Spread in Strategists Year-End S&P500 Guesses Wider Than Ever Before

Just over a month into the year and there have been more cuts for year end targets by strategists and analysts this early in the year than ever before. Strategists and analysts are famous for their herding – but not right now. The gap between the highest and lowest...
18
JAN
2016
SPX Weekly

It is ‘Bleedin’ Obvious’ or, if you prefer, Occam’s Razor

Believe your eyes. The bleedin’ obvious is very often correct. If you want to appear all intellectual, say you turned bearish because of Occam’s Razor. The trend is your friend – until the end. I teach this in both my Introduction and Advanced Technical Analysis...
16
JAN
2016
Warren Buffett

2016 the Year Warren Buffett Revealed as the Emperor with No Clothes.

We, the investing public, like to think there are gurus who can lead us safely and surely to profits. We need them and create them. In Behavioural Finance there has been much study of crowds and their need for leaders. The crowd will sometimes justify their choice blindly and be...
11
JAN
2016

Statistical Test of Three Popular DeMark Technical Indicators

Late last year, Marco Lissandrin ETH Zurich, Donnacha Daly ETH Zurich and Didier Sornette Swiss Finance Institute; ETH Zürich – Department of Management, Technology, and Economics (D-MTEC) published a research piece of great importance to us fans of the work of Tom DeMark....
08
DEC
2015

Interview with risk guru, Ralph Vince

Here are some very insightful interviews with Ralph Vince of Optimal f fame. His book, Portfolio Management Formulas helped me a lot and has gone on to write other excellent stuff on portfolio risk measurement. Learn and enjoy.  https://www.youtube.com/watch?v=LLikimv90P8...