Wall Street Journal reporter Luis Garcia spotlights how Prof. Antoinette Schoar and University of Chicago Prof. Steven Kaplan developed a public-market-equivalent (PME) method known as the Kaplan-Schoar approach that serves as an alternative advantage in comparing fund performance with stock market benchmarks. “The thing that PME allows you to do better is compare across fund vintages,” says Kaplan.
Bloomberg reporter Lynn Thomasson writes that a new study by MIT researchers explores the demographics of people who panic sell during stock market dips. “Financial advisors have long advised their clients to stay calm and weather any passing financial storm in their portfolios,” the researchers explain. “Despite this, a percentage of investors tend to freak out and sell off a large portion of their risky assets.”
A new study by graduate student Chi Heem Wong examines panic selling during periods of stock market volatility dips, reports Kate Dore for CNBC. “Panic selling is predictable,” explains Wong. “It’s pretty consistent over time that people with certain attributes tend to panic sell more often than others.”
The Wall Street Journal’s Jason Zweig examines the investment strategies of former Institute Prof. Paul Samuelson, including his purchases of Berkshire Hathaway stock in the early 1970s. Zweig notes, “In an interview this week, [Warren] Buffett says Prof. Samuelson believed the same thing he does: that markets are 'generally very efficient but not perfectly efficient.'”
Prof. Andrew Lo speaks with Michael Regan of Bloomberg News about the recent volatility in the stock market. “We have a number of different forces that are all coming to a head,” explains Lo. Due to automated trading “we’re seeing much choppier markets than we otherwise would have five or 10 years ago.”
Professor Yasheng Huang writes for The New York Times about the role of the government in the recent downturn in Chinese markets. “The current mess is entirely due to the active encouragement by the authorities to invest in the markets and to lax regulations," Huang writes.
BBC News reporter Peter Day writes about Prof. Lily Fang’s research examining why stocks and shares traditionally do not perform well in September. Day explains that Fang and her colleagues found that “financial markets - so praised for their efficiency - get less efficient in the summer because people are not paying sufficient attention to what is going on.”
New research by MIT Visiting Scholar Lily Fang shows that stock markets tend to fall after school vacations, Reuters reports. Fang found an "after holiday effect whereby market returns after major holidays are significantly lower than at other times."
USA Today reporter Matt Krantz examines new research by MIT Visiting Professor Lily Fang showing that stock prices typically fall following long school vacations. “The after holiday effect is largely negative because it’s the bad news that gets largely missed during school breaks,” writes Krantz.
Forbes reporter Susan Adams examines a new study co-authored by MIT Prof. Evan Apfelbaum that looks at how diversity impacts the performance of stock traders. The researchers compared groups of ethnically homogenous and diverse traders and found that “traders in the diverse group did a 58% better job at correctly pricing assets.”