Posts filed under “Analysts”

Don’t Let Bias Corrupt Your Analysis

Those of you who over the many years have followed some of the thoughts and observations I jot down each morning may have noticed several themes. Prominent among them is that forecasting is folly; cognitive errors create investing mistakes; consider context when analyzing data; recency bias overemphasizes the latest data; mixing politics with investing is a costly mistake.

Which brings us to an article in the National Review that managed to combine many if not all of these themes: “2014′s Jobs Boom Wasn’t Even Much of a Boom. Does This Jobs Report Mean It’s Already Over?

As I noted back in 2011, “When you are in the polling booth, vote however you like; but when you are reviewing your investing options, it is best to do so with a cold, dispassionate eye.”

The same is true for analyzing economic data. Those of you who zestfully pursue politics will dislike this analysis, for it points out the many errors of your ways. You are not my intended audience; rather, the people who are actual investors will find this useful (and perhaps it will save them some money).

Let’s have a look review some of these analytical errors. 

 

Continues here: Political Bias Corrupts Economic Analysis

 

 

 

Category: Analysts, Cognitive Foibles, Politics, Psychology, Really, really bad calls

S&P 500′s Dubious Market-Cap Weighted Anniversary

  click for larger graphic     The Standard & Poor’s 500 Index is market-capitalization weighted, meaning that companies with higher stock-market valuations have a bigger influence on the index. There has been a cottage industry of criticism about this structure. Recently, it has led to a new world of fundamental indexing and so-called smart…Read More

Category: Analysts, Index/ETFs, Markets, Valuation

Apple Earnings Show Why You Can’t Trust Pundits

Category: Analysts, Media, Technology, Video

Apple’s Q Reveals the Perils of Earnings Predictions

Apple’s first-quarter earnings were blow-out numbers. Far beyond what anyone forecast, the figures show Apple arguably had the single-greatest quarterly performance in U.S. corporate history. A quick overview: Apple’s net profit of $18 billion is an astonishing gain of 38 percent over the already-huge $13.1 billion in the same quarter last year. (So much for…Read More

Category: Analysts, Earnings, Technology

RIP Paul Macrae Montgomery, originator of Magazine Cover Indicator

  Paul Macrae Montgomery, best known as the originator of the Time Magazine Cover Indicator, and for popularizing the Hemline Indicator of the stock market, died this weekend. He was 72. I was fortunate to have had several conversations with Mongomery over the years. He was humble and soft spoken but he took delight in…Read More

Category: Analysts, Markets, Psychology

Dilbert: Beating Earnings Estimates

Presented without comment:   Source: Dilbert

Category: Analysts, Corporate Management, Humor

Morgan Stanley’s Adam Parker Capitulates

Until, not so long ago, Morgan Stanley’s Adam Parker was one of the most bearish analysts on the street. He had consistently violated one of the first rules of the market: Never mix politics with investing. Following last year’s 30% S&P 500 rally, he has had a change of heart. He now has a 3000…Read More

Category: Analysts, Investing

Enjoy Your Weekend Reading on the CAPE

In our discussion of Mr. Market, we made passing reference yesterday to CAPE, Yale professor Robert Shiller’s 10-year cyclically adjusted price-earnings measure. This led to quite a conversation via a series of e-mails and Twitter posts from an assortment of analysts and asset managers. I received research from or by Cliff Asness, Michael Kitces, Mebane…Read More

Category: Analysts, Data Analysis, Valuation

Wall St Bullishness vs Equities Complacency

Funny to wake up after yesterday’s selloff to see two such diametrically opposed views from major investment houses:    

Category: Analysts, Sentiment

What makes Analysts Cover Stocks?

David J. Merkel, CFA runs his own equity asset management shop, called Aleph Investments, running separately managed stock and bond accounts for upper middle class individuals and small institutions. He has a background as a bond manager and life actuary and hold bachelor’s and master’s degrees from Johns Hopkins University.     While at RealMoney,…Read More

Category: Analysts, Valuation