Posts by Wesley R. Gray, Ph.D.

Momentum Investing: Ride Winners and Cut Losers. Period.

July 16, 2014

Momentum has historically been a great strategy. Although counter-intuitive to many value investors, buying stocks with rising prices has been a great investment approach--arguably better than value investing. Moreover, the approach is robust between the 2 samples analyzed. The lesson is clear: Let your winners ride and cut your losers short.

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How to Build Expected Return Forecasting Models

July 14, 2014

Investors are enamored with various investment houses and personalities who claim insight into the prospects for long-term expected market returns. Some classic examples include Nouriel Roubini, John Hussman, David Rosenberg, or Jeremy Grantham. All really smart people. But have you ever asked "How" these folks came to their conclusions? In most cases, the answer is probably "No" and the reason is because there is a lack of transparency from the author(s) and/or a lack of knowledge/understanding on behalf of the reader. We also want to highlight that one can develop incredibly complex return forecasting models -- super sexy, super interesting, super compelling, etc. -- but that still doesn't mean they are any good at forecasting much of anything.

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Summer–A Time to Learn!

June 30, 2014

Readers: We exist to empower investors through education. Typically, we cover source academic literature and other topics that require an

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Recent Resarch on Predicting Bubbles

June 27, 2014

  Fulcrum Asset Management has an interesting overview piece related to some recent research that attempts to predict bubbles:

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