The Investor’s Brain vs. Itself —
Behavioral Finance Insights c/o Dan Egan & Jim

Categories Insight, Investing, OSAM Research

“I can calculate the motion of heavenly bodies, but not the madness of men.”

— Sir Isaac Newton

“Human performance suffers because we are, deep down, deterministic thinkers with an aversion to probabilistic strategies that accept the inevitability of error.”

— Philip E. Tetlock, Expert Political Judgement1

Behavioral finance is defined as “the study of the influence of psychology on the behavior of financial practitioners and the subsequent effect on markets.”2 In other words, it studies how us humans tend to obstruct ourselves from maximizing financial returns and how our collective “investor sentiment” drives market action — and/or non-action. The field has blossomed lately, particularly in the wake of Daniel Kahneman’s 2011 bestseller Thinking Fast and SlowContinue reading “The Investor’s Brain vs. Itself —
Behavioral Finance Insights c/o Dan Egan & Jim”

2017 Factor Alpha Newsletter
International ADR

Categories Investing, OSAM Research

While investors have long enjoyed the growth in U.S. equities (usually the largest allocation in their overall portfolio!), regional leadership is a cyclical pattern. At some point, it is very likely the U.S. will no longer be the highest-performing market globally. Huh?1 Sure, the U.S. equity market has risen 293% since its credit crisis bottom in March 2009 — versus Developed International and Emerging Markets “mere” rise of 150% and 154%, respectively. Well, this 2Q17 International ADR2 (IADR) edition of the Factor Alpha Newsletter, dispassionately, sans headlines and other noise, compares our built-in-house multi-factor themes to the MSCI ACWI ex U.S.3

Continue reading “2017 Factor Alpha Newsletter
International ADR”

Visualizing Factors & Themes — What You See is What You Get

Categories Insight, OSAM Research, Value, Yield

“Is there a point where index funds theoretically can’t work a course?” asked Charlie Munger at this year’s Daily Journal Corporation Annual Meeting.1 “If everybody bought nothing but index funds, the whole world wouldn’t work as people expect.”

We agree.
So to help animate Munger’s premonition in real-time (see the cheery motion graphics below), our Team’s Developer / Performance Analyst)2 rolled up his coding sleeves and hacked into our “Factor Style Grid”.  Continue reading “Visualizing Factors & Themes — What You See is What You Get”

Discovering Under-Covered Microcap Stocks
on Bloomberg Markets

Categories Interview, Investing, OSAM Research

BBR logo

Guest Jim O’Shaughnessy, OSAM’s CIO/CEO, and Carol Massar1 find much to discuss during his periodic visit to her daily Bloomberg Markets radio program. For more research on this topic, go to the microcap archives.

The interview2 begins 2 minutes into the recording…

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“Bloomberg Markets: O’Shaughnessy on Investing in Micro-Caps” transcript: Continue reading “Discovering Under-Covered Microcap Stocks
on Bloomberg Markets”

2017 Factor Alpha Newsletter
Small Stocks

Categories Investing, OSAM Research

So far in 2017, investors saw how multi-factor exposure to Value — in concentrated portfolios — can be beneficial in the small cap space.1 This 1Q17 Small Cap2 edition of the Factor Alpha Newsletter (see also: All Stocks & Global Large Cap) compares our proprietary multi-factor themes3 to the Russell 2000® Value Index (R2000V).4

Continue reading “2017 Factor Alpha Newsletter
Small Stocks”

MoneyLife Radio Grills OSAM’s CIO

Categories Interview, Investing, OSAM Research

“[Market forecasters] are so far off that you’re much better giving a monkey a coin and going with whether it lands heads or tails.”
— Jim O’Shaughnessy, OSAM Chairman & CEO/CIO


Chuck Jaffe, acclaimed
MarketWatch columnist and “The Big Interview” host,1 challenges the continuing OSAM tradition of “completely ignoring Washington D.C. and other noise,” provoking Jim to blurt out the derogatory monkey comment quoted above.2

“The Big Interview: Jim O’Shaughnessy” Continue reading “MoneyLife Radio Grills OSAM’s CIO”

Bloomberg Markets’ Carol Massar Asks OSAM:
Active or Passive?

Categories Interview, Investing, OSAM Research

Last week was the 8-year anniversary of The Great Recession’s March 9, 2009 market bottom. To celebrate, or whatever you’re supposed to do to commemorate low points, we offer the first in a series of recent interviews with the OSAM Research Team. Honestly, even if this conversation happened the next day, March 10, 2009, the tenor would’ve been about the same: If your formula works, stick to it.

“O’Shaughnessy on Active vs. Passive” Continue reading “Bloomberg Markets’ Carol Massar Asks OSAM:
Active or Passive?”