Investors rarely worry about the global economy running out of money. Faith in central banks and liquidity is deeply ingrained. It may even just be cynicism; a belief that central banks will print whatever politicians want. But could the global economy be entering a period where US Dollars are scarce? The Dollar is nearing an […]
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Tag Archives: Gambler’s Fallacy
Momentum & the Gambler’s Fallacy
September 7, 2012 
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Momentum has been the big surprise for investors this year. Markets may seem largely directionless, but many big stocks have nevertheless carried on rising. Large cap global businesses have become more and more expensive, as investors climb aboard this rising trend. Across Europe, the valuation gulf between global and domestic businesses is at a multi-year […]
Continue readingMarket anomalies, momentum & the gamblers fallacy
July 14, 2010 0 Comments
Quirks of investor behaviour get magnified in the summer. Low trading volumes and a lack of company news can make markets behave oddly. Investors fall back on folklore and succumb to their own psychological biases. Rules like “sell in May” and “never short a dull market” indicate the unwillingness of investors to take a position […]
Continue readingStockmarket volatility and the gamblers fallacy
May 13, 2010 0 Comments
Sharp market sell-offs look like the ultimate irrational investor behaviour. It is hard to understand why share prices of banks and other big companies should drop more than 10% in days, despite little change in the economic background. May’s volatile stockmarket seems bizarre, contradicting any concept of market efficiency. But it provides a real opportunity […]
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Behavioural Edge 
Reuters market commentary; don’t bet on a setback
My comments on Reuters. Despite the recent strong run, there may not be a pullback. Investors are rotating into industrials in expectation that weaker £ will boost earnings. http://t.co/20fQGyBm
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