Human beings are prone to a variety of behaviors that make them bad investors, and in an article for The Economic Times, Vivek Kaul looks at a major one: “loss aversion”. First identified and named by psychologists Daniel Kahneman and Amos Tversky, loss aversion is a phenomenon in which “people tend to base their decisions [...]
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Archive | May, 2011
Greenblatt on Value, Time, and Discipline
May 16, 2011
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In an interview with Barron’s, hedge fund guru and author Joel Greenblatt talks about how and why value-focused strategies tend to beat the market over the long haul, and where he’s currently finding opportunity in the market. “The way we make money as a group is that we don’t pay a lot for anything, and [...]
Read moreCohen Sees Solid Growth, “Pause” for Stocks
May 13, 2011
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SAC Capital’s Steven Cohen, whose hedge fund has returned 30% per year for 18 years, sees a pause for the stock market, but solid economic growth in the second half of 2011. “Cohen … said he expects the stock market to take a ‘pause’ and that while he was optimistic about the second half of [...]
Read moreDemographics, Growth, and Stock & Bond Returns
May 13, 2011
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We recently highlighted data about the changing demographic make-up of the U.S., and the issue of what that means for the economy and stock market. Now, a new study shows that it may mean quite a bit — if history repeats itself. The study — “Demographic Changes, Financial Markets, and the Economy” — was performed [...]
Read moreMarket Fear Has Two Top Managers Feeling Bullish
May 13, 2011
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While many investors have been growing fearful in recent weeks, hedge fund guru Ron Baron says he’s still confident stocks are the place to be, in part because of their ability to withstand inflation. “The stock market is setting up like a springboard right now,” Baron tells Fortune. He notes that the stock market has [...]
Read moreGrantham: Time to Dial Back Risk — Though It Might Be Too Early
May 12, 2011
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GMO’s Jeremy Grantham has released the second half of his first-quarter letter, and in it he recommends dialing back risk — though he admits he may in the end prove to be a bit early on his call. Previously, Grantham had said he expected an already overvalued S&P 500 to push into the 1,400 to [...]
Read moreTilson Sees Economy “Muddling Along”; Playing Defense with Portfolio
May 12, 2011
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Top value investor Whitney Tilson says that we’re in unusually uncertain times, and that he’s playing defense with his portfolio. “We believe that we are in a period of ‘unusual uncertainty’”, Tilson says in a lengthy presentation that also includes a good deal of information about behavioral finance and the biases that investors are prone [...]
Read moreMobius Still Likes Brazil
May 12, 2011
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Templeton Asset Management’s Mark Mobius says Brazil is continuing its solid recovery from the global recession, and remains an attractive place to invest. In a piece written for the U.K.’s Citywire, Mobius detailed a recent trip to Brazil during which he examined several businesses. “These visits and others we recently made in Brazil indicate a [...]
Read moreReese on NatGas Firms with Big Potential
May 11, 2011
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U.S. and Canadian energy firms have been making a slew of natural gas-related acquisition in the past year or two, and in his latest piece for Canada’s Globe and Mail Validea CEO John Reese takes a look at some of his favorite stocks in the potential-packed natural gas arena. “It’s a trend that is only [...]
Read moreBiggs Likes Manufacturers, Capital Equipment Stocks
May 11, 2011
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Hedge fund guru Barton Biggs says he has more confidence in the U.S. market than other markets around the world. “We’ve been through a period here where the bull case for the global economies has definitely weakened in the last week or so,” Biggs recently told Bloomberg. “[But] I still feel good about the U.S. [...]
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