Abstract: The performance of Renaissance Technologies’ Medallion fund provides the ultimate counterexample to the hypothesis of market efficiency. Over the period from the start of trading in 1988 to 2018, $100 invested in Medallion would have grown to $398.7 million, representing a compound return of 63.3%. Returns of this magnitude over such an extended period
Economic Insights
CORNELL CAPITAL GROUP
https://www.valuewalk.com/2020/01/big-market-delusion/ Soon after its introduction as a private company, the market value of Uber began to explode. One reason was the potential size of the market. Uber was billed not only as a potential global ride sharing company, but as a new kind of transportation company. If Uber could capture a meaningful fraction of this
There is nothing more exciting for a nascent business than the perceived presence of a big market for its products and services, and the allure is easy to understand. In the minds of entrepreneurs in these markets, big markets offer the promise of easily scalable revenues, which if coupled with profitability, can translate into large
In April of 2018, Rob Arnott, Shane Sheppard and I published an article entitled, Yes, It’s a Bubble, So What?. Given the turbulence of the intervening fifteen months, and to hold our feet to the fire, we felt a follow-up was in order (Bubble, Bubble, Toil and Trouble). For perspective, both articles are available for
You often hear that as part of a restructuring to improve its financial position, a company plans to sell assets. GE is a focal point of such discussion currently and the company has sold off some divisions. But before you accept the view that such actions are beneficial, you must ask yourself where the benefit
The total market value of a company can be divided into two parts: the fraction of due to current and short-run foreseeable operations and everything else. Financial economists have used the term “growth options” to describe the everything else. Growth options are the new projects that a company will take
[vc_row css=”.vc_custom_1553717404256{margin-top: 100px !important;margin-bottom: 100px !important;}”][vc_column width=”1/2″][vc_single_image image=”1210″ img_size=”full”][/vc_column][vc_column width=”1/2″][vc_column_text] On repeated occasions, Eugene Fama has claimed that critics have failed to offer a complete alternative to the efficient market hypothesis (EMH). More specifically, in his Noble speech, Fama said, “Most important, the behavioral literature has not put forth a full blown model for prices
[vc_row css=”.vc_custom_1553718960683{margin-top: 100px !important;margin-bottom: 100px !important;}”][vc_column width=”1/2″][vc_single_image image=”1213″ img_size=”full”][/vc_column][vc_column width=”1/2″][vc_column_text] With sky-high valuations in the US stock market, and what we believe is a tech bubble that has dangerous implications for other areas of the market, we suggest four actions investors can take now to avoid the inevitable bursting of the bubble, and which will
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