Yesterday, the Securities and Exchange Commission "announced charges against nine defendants for participating in a previously disclosed scheme to hack into the SEC's EDGAR [Electronic Data Gathering, Analysis, and Retrieval] system and extract nonpublic information to use for illegal trading."
Mon Jan 14 Asia Financial Forum. | Tue Jan 15 Brexit vote in London. | Wed Jan 16 Fed's Beige Book. | Thu Jan 17 G20 deputy finmins in Tokyo. | Sun Jan 20 Super blood wolf moon.
What do professional investors do? "We document a striking pattern: while the investors display clear skill in buying, their selling decisions underperform substantially. Positions added to the portfolio outperform both the benchmark and a strategy which randomly buys more shares of assets already held in the portfolio. This result holds both in terms of raw returns and adjusted for risk. In contrast, selling decisions not only fail to beat a no-skill strategy of selling another randomly chosen asset from the portfolio, they consistently underperform it by substantial amounts. PMs forego between 50 and 100 basis points over a 1 year horizon relative to this random selling strategy, depending on the specification. As with buys, the selling result is robust when adjusting for systematic risk of the assets sold." Selling Fast and Buying Slow: Heuristics and Trading Performance of Institutional Investors
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