Tuesdays are all about academic (and practitioner) literature at Abnormal Returns. You can check out last week’s links including a look at using the variance risk premium to help market time.
Quote of the Day
"Although applying a lower discount rate in a DCF raises the valuation, it assumes that cash flows are unchanged. Naturally, this is a flawed assumption and explains why there is no strong negative relationship between interest rates and equity multiples."
(Nicholas Rabener)
Chart of the Day
Long term investors in the U.S. have been spoiled.
Behavior
- Trading on a smartphones seems to have a dis-inhibiting effect. (papers.ssrn.com)
- Preservation of image: why humans avoid information. (nber.org)
- Why you shouldn't trade while high. (klementoninvesting.substack.com)
Emerging markets
- Emerging markets are not a static thing. (morningstar.com)
- Why the idea of 'emerging markets' is likely outdated. (realreturns.blog)
Fees
- Why evidence of alpha is usually washed away by fees. (evidenceinvestor.com)
- Why private equity firms are slow to sell down stakes in now public companies. (institutionalinvestor.com)
Research
- There is good evidence that 'gamma' hedging really does affect intraday stock prices. (alphaarchitect.com)
- Strong U.S. equity performance for the past decade made diversification efforts a drag. (researchaffiliates.com)
- Is factor investing really only effective during 'normal' times? (cxoadvisory.com)
- There is a difference between macro uncertainty and macro volatility. (sr-sv.com)
- An overview of that past month's white papers including 'Bitcoin: Magic Internet Money.' (bpsandpieces.com)
- On the importance of 'portfolio craftsmanship.' (mrzepczynski.blogspot.com)
