Buying a stock is one thing, but when do you sell? That question will have been nagging many nervous investors in recent months, after watching global stock markets tumble. One potential solution is to use stop-loss orders that ensure you exit your position when the price falls below a designated point. Do stop-loss orders work? Can they help investors sleep better at night by cutting back on risk? Or are stops a trader’s tool, best left to those who nip in and out of markets rather than investors with multiyear horizons?
Derek Lowe's commentary on drug discovery and the pharma industry. An editorially independent blog from the publishers of Science Translational Medicine. All content is Derek’s own, and he does not in any way speak for his employer.
Andrew W. Lo was named winner of the $10,000 Harry M. Markowitz Award for his paper, "Moore's Law Vs. Murphy's Law in the Financial System: Who's Winning?" The award was announced Thursday by the Journal of Investment Management and New Frontier Advisors in a joint statement. The paper provided examples of technology capable of adapting to the "foibles in human behavior" so users can employ all the recent breakthroughs in computing hardware and software, data analytics and telecommunications that have changed the financial industry "safely, effectively and effortlessly," according to an abstract on the paper.
מפגש מבהיל בגן החיות חשף בפני פרופ' אנדרו לוֹ את ההיגיון האבולוציוני ששולט בשוק ההון, ושלח אותו למסע שהסתיים ברב־מכר פורץ דרך. עכשיו הוא מסביר ל"כלכליסט" מהי תורת השווקים המסתגלים, איך מבדילים בין זנים שונים של משקיעים ולמה בג'ונגל הפיננסי שולט עקרון הישרדות העשירים
Murphy’s Law says that anything which can go wrong, will go wrong. Moore’s Law says that computing power will double every 18 months or so. Technology drives financial innovation and activity. Andrew Lo, a professor at the Massachusetts Institute of Technology has merged these ideas into a map of today’s financial system, a world where the speed of innovation is fast outstripping the ability of regulators to keep pace. As he told an audience of politicians at a New City Agenda event in the Palace of Westminster last month, the speed and complexity of financial markets increases by the day; human understanding does not.
As we draw closer to the 10-year anniversary of the global financial meltdown, a lot of investors seem convinced we won't be revisiting anything remotely resembling that period of extreme wealth destruction any time soon. And who can blame them? The value of their rebuilt portfolios has soared during a sustained stretch of well-below- normal interest rates, strong earnings growth, inflated asset values and record-low volatility. Bullish forecasters predict more of the same for 2018, playing down a host of potential pitfalls.
Legendary investor Warren Buffett once described it as a "mirage" to be avoided by any sensible investor. JP Morgan Chase chief executive Jamie Dimon has famously described it as a "fraud" and last month warned that if "you're stupid enough to buy it, you'll pay the price for it one day." Another global bank boss, Credit Suisse's Tidjane Thiam, calls the manic trading that has driven its price into the stratosphere the "very definition of a bubble" that's destined to end badly.