Archives for stock



Should “TailSpotting” Be on Your Stock-Research Checklist?

From a new working paper by David Yermack, an economist at NYU/Stern, called “Tailspotting: How Disclosure, Stock Prices and Volatility Change When CEOs Fly to Their Vacation Homes” (abstract; older version in PDF):

This paper shows close connections between CEOs’ vacation schedules and corporate news disclosures.  I identify vacations by merging corporate jet flight histories with real estate records of CEOs’ property owned near leisure destinations.  Companies disclose favorable news just before CEOs leave for vacation and delay subsequent announcements until CEOs return, releasing news at an unusually high rate on the CEO’s first day back.  When CEOs are away, companies announce less news than usual and stock prices exhibit sharply lower volatility.  Volatility increases immediately when CEOs return to work. 

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The Best Trader in the World Worked for Bernie Madoff

The night Bernie Madoff got caught for running a $60 billion Ponzi scheme I got a call from my friend “Eddie” (not his real name) who for many years worked for Madoff. I couldn’t tell if he was crying but he was very upset. “I can’t believe it,” he said, “Bernie was like a father to me. Mark Madoff was like a brother to me.” We spoke on and off all night as more news came in and he came to grips with the new world he was living in.

I called Eddie yesterday and said I wanted to write an article about him and how I thought he was the best trader I ever knew. I’ve met and worked with over a thousand traders. I traded for hedge funds. I ran a fund of hedge funds. I’ve written five books on trading. And Eddie is the best trader I’ve ever come across. Read More »



Putting the “I” in “IPO”

Cathal Morrow, who’s in the midst of a year without unhappiness following his year without lying, has a new project: “Me Me Me Plc, a company he plans to float on the London Stock Exchange by selling shares in himself. It’s ?10 a share, which gets you a photograph of Cathal in lieu of a share certificate.” Read More »



Looking to Twitter for a Market Edge?

If you’re looking for a hot stock tip, consider Twitter. A new paper by Timm O. Sprenger and Isabell M. Welpe looks at the effects of microblogging on stock prices. Read More »



Recanting a Small Part of Lifecycle Investing

On page 9 of Lifecycle Investing, Barry Nalebuff and I write:

“[B]efore you invest in stocks, first pay off all your student loans and credit card debts.”

On reflection, we were only half right. You should pay off your high-interest-rate credit card loans before investing in stock. But in this post from our Forbes blog, Barry and I show why young investors need not pay off their student loans before investing in stock. Read More »



Did Paul Samuelson Support Leveraged Lifecycle Investing?

Here is a post coauthored with Yale School of Management professor, Barry Nalebuff, regarding Paul Samuelson’s criticisms of our Lifecycle Investing strategy. Read More »



The Quiet Danger of Non-Inflation-Adjusted Stock Returns

In today’s Wall Street Journal, E.S. Browning has written a quietly important article (gated) about the fact that stock-market returns are almost never adjusted for inflation. While most shrewd investors factor in this omission, my sense is that a great many people never think about it, and therefore significantly overestimate their investment gains. Read More »



Are the Lakers a Sure Thing?

For the 20-year period ending in 2007, the Los Angeles Lakers’ NBA championship record did a surprisingly good job of reflecting the stock market. Read More »