China will soon become the largest economy in the world, but many Westerners (myself included) know very little about it. I’ve thus tried to
How Macroeconomic Conditions Affect Stock Prices
John Cochrane of Stanford has written an excellent review of recent advances and future research directions in macro-finance. Macro finance studies
Translating the New USS Pension Rules Into Plain English
Andy Haldane, the Chief Economist of the Bank of England, said that pensions are so complex that even someone "moderately financially literate" like
Size Matters, If You Control Your Junk
The first stock market trading strategy ever discovered was the size anomaly. Banz (1981) found that small stocks outperform large stocks, even after
Higher Stock Returns When CEOs Own More Shares
Executive compensation is a controversial topic. US CEOs earn 373 times the average worker, and so it takes them less than a day to earn the same as
Predicting Mutual Fund Performance Using (Legal) Inside Information
How does an investor choose which mutual fund to invest in? She’ll want a measure of the fund manager’s skill, and the most natural measure is his
The Effect of the 2014 World Cup on Stock Markets
(Update 15 July) The 2014 World Cup is now over. After Argentina's loss in the final, its market was up 0.2%, underperforming the world index which
Underperformance of Companies Holding Meetings in Remote Locations
If a company has bad news that it wishes to hide, where will it hold its shareholder meeting? As far away as possible! That’s the hypothesis of an
Profiting from momentum strategies – Part 2
The previous post concerned momentum - a strategy of buying past winners and selling past losers. It discussed how this strategy does well on average,