Stock Exchange: How to Use Backtests Effectively

  Everyone interested in managing their own money ought to keep an old idiom in mind: if it seems too good to be true, it probably is. Unfortunately, greed is a powerful motivator. It’s tempting to see a new model with an incredible backtest and think this could be the answer. Experienced investors know that […]

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Stock Valuation and Occam’s Razor

Among competing hypotheses, the one with the fewest assumptions should be selected. William of Occam   The use of this principle is valuable, but not completely determinative in science.  It often has an important application in investing. Let us consider two hypotheses. A method of valuing markets that relies upon backward-looking data, looks at replacement […]

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Weighing the Week Ahead: Will an Earnings Surge Revive the Stock Rally?

Are you ready for some real news? How about corporate earnings? While there is some economic data on tap, the Q1 earnings season starts in earnest this week. With questions about economic strength, the dollar and the Fed in mind, pundits will be looking for fresh data. They will be asking: Can resurgent corporate earnings […]

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Stock Exchange: Finding Trading Ideas in a Low Volatility Market

Ted Williams was a terrific ball player, but he had one tactic that many found…questionable. He almost never swung at the first pitch. Many short term traders and individual investors could take a lesson. The market has been dragging sideways for weeks. Volatility is low. There’s a great temptation to force in a few trades. It […]

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