The Auto Sector’s Green Transition: Three Roads to Lower Returns?
Three investment return trends related to the green transition concern me. These apply across all sectors but to automotive in particular. Here is how I see it. 1. Pricing is…
Small Caps: Party Like It’s 2000?
The legendary musician Prince exhorted us to “Party like it’s 1999,” but today, as a small-cap stock investor, I’d flip the calendar one year ahead, to 2000. That’s because by…
How Do Performance Metrics Correlate? Might Fund Managers Cherry-Pick?
Portfolio managers report their risk-adjusted performance using Sharpe, Treynor, information, and Sortino ratios, among other popular metrics. Of course, with various measures to choose among, might fund managers be tempted…
The Benefits of Using Economically Meaningful Factors in Financial Data Science
Factor selection is among our most important considerations when building financial models. So, as machine learning (ML) and data science become ever more integrated into finance, which factors should we…
Rethinking Corporate FX Hedging: Seeing the Forest through the Trees
“It often happens that a player carries out a deep and complicated calculation, but fails to spot something elementary right at the first move.” — Alexander Kotov, Chess Grandmaster Introduction…
Book Review: The Economics of the Stock Market
The Economics of the Stock Market. 2022. Andrew Smithers. Oxford University Press. Judging by the behavior of the stock market, we are living in challenging times for mainstream finance. Under…
Project Finance: Beware Interest Rate Miscalculations
Interest rates are like the weather. We can prepare for typical fluctuations, but sudden changes can still catch us by surprise. After the global financial crisis (GFC), for example, we…
Steve Blank Profound Beliefs
This post previously appeared in EIX. In the early stages of a startup your hypotheses about all the parts of your business model are your profound beliefs. Think of profound…
Why relaxation is as important as sleep – and six ways to do it better
AS YOUR eyes scan these words and absorb this sentence, do you feel you are resting? There is good reason to think you might. In 2016, more than 18,000 people…
Do Better ESG Ratings Boost Bond Holders?
Environmental, social, and governance (ESG) ratings should reflect the risks that such factors pose to a company’s financial performance and how well equipped that company is to manage those risks.…
