Jason Apollo Voss | Best of the Blog

Fact File: Calculating the Illusive Size of “Mr. Market”

Posted by Jason Apollo Voss on Sep 10, 2012 in Best of the Blog, Blog | 0 comments When it comes to explaining the equity market’s mysterious day-to-day moves, the financial media love nothing more than a convenient explanation. “Today ‘the market’ was up . . . ” or “Investors ran for the exits today . . . ” are common refrains. But what or who, exactly, is “The Market”? Which investors? What is implied, but never fully explored, is that there somehow exists...
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Fact File: S&P 500 Sigma Events

Posted by Jason Apollo Voss on Aug 27, 2012 in Best of the Blog, Blog | 0 comments A seemingly endless battle is waged between believers in the efficient market hypothesis, such as Eugene Fama, and believers in behavioral finance, such as Daniel Kahneman. Regardless of your perspective, an analysis of the S&P 500’s history of sigma events provides an interesting field for the battle to be waged. For example, from 3 January 1950 through 31 July 2012, the average daily...
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Lie Detection for Investment Professionals: A Summary of Lying and Deceit Behaviors

Posted by Jason Apollo Voss on Aug 16, 2012 in Best of the Blog, Blog | 0 comments With more than 100 scholarly papers to her name, Bella DePaulo, visiting professor of psychology at the University of California, Santa Barbara, is a preeminent authority on lying and deceit behavior. In her book, The Hows and Whys of Lies, the Harvard University–trained researcher provides a thorough overview of the results of hundreds of lying and deceit behavior studies. Here is a summary of...
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Lie Detection 101 for Financial Analysts: How to Spot Manipulators and Actors

Posted by Jason Apollo Voss on Jul 19, 2012 in Best of the Blog, Blog | 0 comments Financial analysts are in the business of evaluating the truth of information. But there is a shocking lack of academic research about how financial analysts can improve their lie and deception detection skills even though the monetary stakes are measured in trillions (choose your currency). We hope to remedy this situation by covering the topic of lie detection regularly on this blog. For my...
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Capitalism: It’s as Much About Cooperation as Competition

Posted by Jason Apollo Voss on Jul 16, 2012 in Best of the Blog, Blog | 0 comments We have myopically come to believe that “survival of the fittest” is synonymous with competition and is the highest expression of our nature. Yet survival of the fittest also includes those creatures, including humans, who successfully and continuously cooperate to survive. Case in point: Lions adorn the flags of many nations as symbols of individual power and unparalleled ferocity —...
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Components of Credit Spreads and Their Importance

Posted by Jason Apollo Voss on Apr 3, 2012 in Best of the Blog, Blog | 0 comments In an investment world with any number of potential credit shocks (see our coverage of debt crises in the eurozone, China, Japan, and the United States) and trillion dollar/euro/yen/yuan consequences, a detailed analysis of creditor risk and credit spreads is paramount. Contained within the difference between one asset’s current yield and another’s — holding all else equal — is a plethora of...
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Rethinking the Risk-Free Rate, Exploding a Fundamental Assumption

Posted by Jason Apollo Voss on Mar 20, 2012 in Best of the Blog, Blog | 0 comments After the Great Recession (2008 to the present), it is in vogue to criticize the risk-free rate of return as a spurious concept. This is not surprising given the twin sovereign debt crises of the European Union and the United States; both countries’ debt instruments previously served as proxies for the risk-free rate of return. Lost in the current discussion, and perhaps from the concept’s...
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