All Posts by Erik Conley

The Greater Fool Theory

dilbert

One of my favorite TV shows in recent years is HBO’s The Newsroom. The guy who writes the show, Aaron Sorkin, is known for fast-paced, snappy dialog. In the final episode of season 1, economics reporter Sloan Sabbith (played by the lovely and talented Olivia Munn) tells her boss, anchorman Will McAvoy (played by Jeff Daniels): […]

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A Little Tough Love for Stock Pickers

george plimpton detroit lions

Do you consider yourself a member in good standing of the community of amateur stock pickers? If so, you best be a truly exceptional one because if you’re not, the road ahead of you is going to be unpleasant. Maybe you’ve already learned this, or maybe you’re still in denial. Either way, you’re eventually going […]

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Critical Thinking Skill #3 – The Time Value of Money

time value money

The Time Value of Money is one of the first skills a new investor must learn. Simply put, it answers the question “What is the value to me today, of a dollar that I expect to receive at some point in the future?” This article will walk you through the process of answering that question. […]

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A Sector Rotation Stock Screening Algo That Actually Works

Stock-picking algorithms come in many flavors, most of which appear at first glance to be quite appetizing, but in the end are not very pleasing to the palate. But there is a small subset of these factor-based strategies that do produce gastronomical delight. What follows is a sector rotation stock screening algo that actually works. […]

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Characteristics of highly accomplished investors

skill

What do Warren Buffett, George Soros, Carl Icahn, Ray Dalio, Abigail Johnson, James Simons, Thomas Peterffy, Ron Perelman, and Steve Cohen all have in common? They are all highly accomplished investors. And they make up 9 out of the 10 richest Americans, according to Forbes, Inc. Introduction The fact that 9 out of the 10 […]

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The Top Momentum Stocks (and how to trade them)

I have written a few articles recently, about factor-based investing. As I’ve pointed out, momentum is one of the oldest and most enduring animals in the Factor Zoo. But what exactly is momentum? Is there a specific definition, or is momentum open to interpretation? If you were to pose this question to a quant trader […]

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Trade Alert: VIX Calls

The VIX index is a measure of anxiety among participants in the options market. Specifically, options on the future price of the S&P 500 index. When options investors are anxious about the future for the S&P index, they increase their purchases of put options in order to hedge the downside. When they do this, the […]

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How to Increase Your Odds of Winning at the Investment Game

How to Increase Your Odds of Winning at the Investment Game Summary Stock market strategy can be understood using game theory. The players in this game have widely different skill sets. Profits flow from low-skilled players to those with better skills. Every investor has a strategy, even if that strategy is “I just go by […]

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Are You Paying For Useless Advice?

smart beta wizard

Are you paying for useless advice? False experts, the “Hot-Hand Fallacy”, and the “Law of Small Numbers.” Can people be fooled into believing in a non-existent expert? If so, will they then pay for what can only be described as useless advice about future chance events? The answer is yes, and this type of misjudgment […]

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