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 […]
As some market worries have been put to rest, there is a growing appetite for new ones. Pundits who say that things look OK are not very exciting. Last week we saw a shift in attention. Despite healthy earnings and good economic data, I expect pundits to be asking: What should investors be worried about? […]
Every trader has a method linked to a time frame. Our group has some new ideas, but the members are sticking to their guns on some positions. Long-term viewpoints emphasize an economic rebound, with materials and energy stocks leading. Short-term methods show opportunities in financial stocks and software. Review Our last Stock Exchange discussed contrarian […]
Last week I suggested that the market might be ready for some real news—corporate earnings. That is still a key topic, but attention is focused on world events. Pundits will be asking: How Should Investors Respond to Geopolitical Risks? Last Week Last week the economic news was good, but mostly ignored. Theme Recap In my […]
Every trader wants to be a contrarian. You get to be the “smart money.” You buy low and sell high. Buy the dips and sell the rips. Contrarians may not always be right, but they certainly get attention. Brett Steenbarger, everyone’s favorite expert on trading, did a study of this in 2006. He compared two […]