July 18, 2022

#33 Reflections on Investing : Interpreting the Market P/E Ratio

From the pandemic lows of March 2020 to the end of 2021, stocks had an incredible run. Earnings were up but so too were P/E ratios. As the market climbed many warned that valuations had become unjustifiably high.  With the S&P 500 down nearly 20%, P/E ratios have returned to their historic average leaving many

July 5, 2022

Investor Memo Q2 2022 : Taking Stock

Download Memo as PDF Looking Back Too often financial market analysis is focused on the issue de jour – jumping from hot topic to hot topic with little reference to what was said in the past. Breaking from this tradition, this quarterly memo takes stock of what we have said in the past to provide perspective

June 28, 2022

Global Climate Change

Congrats to Senior Advisor Prof. Bradford Cornell, who along with co-author Prof. Ivo Welch, have released a new book, Global Climate Change. Global Climate Change provides a comprehensive, data driven analysis of climate change from an economic perspective. It provides a pragmatic analysis of the economic challenges and tradeoffs that must be confronted as part of the

June 13, 2022

#32 Reflections on Investing : ESG and Investment Returns

There has been an explosion of interest in ESG investing, in part because many investors believe it leads to superior investment returns. Unfortunately, that belief does not stand up to careful scrutiny as we explain in this latest episode.

May 19, 2022

#31 Reflections on Investing : Will Elon Musk Buy Twitter? What Does the Market Think?

Elon Musk recently proposed a buyout of Twitter at 54.20 per share. Twitter stock traded over 50 following the news but in recent weeks the stock has dwindled. What can we infer from Twitter’s stock price about the possibility of Musk’s completing his acquisition of Twitter?

May 9, 2022

#30 Reflections on Investing : The Best of Times, The Worst of Times

Recent times have been dreadful for investors especially for holders of growth and tech stocks (See “The Crash of the High Fliers”) . Many are waiting for signs of an upturn. Do a few big up days mean the carnage is over?

May 2, 2022

#29 Reflections on Investing : Expectations and Valuations

Growth in earnings doesn’t necessarily equate to growth in a stock’s price. A company’s growth must meet or exceed the expectations of its investors to increase the stock price. When they fall short of these lofty expectations the results generally spell trouble for shareholders.

April 13, 2022

Investor Memo Q1 2022

Download Memo as PDF Time For a Change? There are two themes that we have stressed in our quarterly memos and in various episodes of our Reflections on Investing video series. The first is that interest rates have been extraordinarily low, particularly relative to the rate of inflation. The second is that stock prices have been

April 4, 2022

#28 Reflections on Investing : Fixed Income?

Until recently fixed income has offered high risk and low return. It looks like things might be changing. We take another look.

March 29, 2022

Data Mining, Non-stationarity, and Entropy

By Bradford Cornell Tweet 0 Share 0 Download PDF Introduction            This paper provides simple intuitive explanations for three interrelated concepts that have provocative, implications for investment management: data mining, non-stationarity, and information entropy. The first two have been extensively analyzed in the literature and the point of this article is