The Sell-Off Continues - Today's Editors' Picks
By SA Editors' Picks :
Good evening! I'm your curator, Jason Kirsch. Today, we're back to our standard format. However, Saturday morning, we'll compile some of the best analysis of the ongoing correction. Stay tuned!
Here are today's Editors' Picks:
- Investors react to the selloff (Rebecca Corvino)
- When the market punches you out (SA For FAs)
- Much ado about sell-offs (SA Multimedia)
- Historical S&P Sharpe ratios (Ploutos)
Chart of the day:Risk-reward in different asset classes during different periods .
Comment of the day, by contributor MM1966
When you can have a return series, and have a good estimate of one parameter and not the other. Lets' look at this in some detail because it shows there is little actual content in this article:Standard deviation was often used to calculate VaR, in effect basing the calculation assuming returns are normal. The Federal Reserve approved many of these models because they back-test, meaning that they don't flat fall on their fact when giving a sense of if the portfolio is going to exceed say the 95ile. OF course the industry has moved on and we have historical simulation etc. But it is well known in the stats and finance/economics departments the issues with calculating standard deviation, how to improve the calculation and the standard error. So for example, Engle won a Nobel prize in economics on GARCH.On the other hand, in the stats and finance/economics department it is also equally well known that estimating expected returns is a very difficult problem. You take 10 years of data and calculate expected return and your
Image of the day:Blue moon
Quote of the day:
"Prices are too high" is far from synonymous with "the next move will be downward." Things can be overpriced and stay that way for a long time . . . or become far more so." - Howard Marks
Thanks for reading. Please share your 'Editor's Pick' with fellow investors by posting it in the comments.
Have a great day!
See also Spirit Airlines: An Ideal Investment With High Growth Potential on seekingalpha.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.