Blogs

Tracking Analyst Optimism in Palantir Finance

We examine an interesting study recently published in the April 2010 McKinsey Quarterly.  The study can be found here (registration required), and the results are further discussed here.  This study examines a phenomenon known as “optimism bias” – the tendency of analysts predicting company performance to over-estimate how well a company will perform.   Analysts are [...]

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Reverse Stock Splits

A recent Motley Fool article discusses reverse stock splits and their implications for future performance: “Investors have to wonder:  Will reverse splits do any good, or are they basically the kiss of death for a company?”  With Palantir Finance, we can easily examine the short-term performance of companies that undergo reverse stock splits.  This question [...]

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The Fed Model

In this post, we will describe an equity trading strategy called the “Fed Model”.  The Fed Model refers to a method of evaluating equity markets versus fixed income markets, which claims that earnings yield of the S&P 500 (predicted forward earnings divided by the current price) can be compared to the yield of the 10-year [...]

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Portfolio Analysis

When a fund manager makes a portfolio, he has ideas about individual positions and why he put those positions on.   But although each position may make sense by itself, the portfolio as a whole could be over-exposed to certain factors that the manager is not aware of. The portfolio below is a sample fund portfolio [...]

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Investing in Cheap, Efficient Companies

In this blog post we explore a strategy that buys cheap companies with high return on assets. To measure the performance of this strategy we created an Index of such stocks and rebalanced it yearly, investing equally among the chosen stocks. In quantitative terms, the stocks we picked at each rebalance satisfied the following criteria: [...]

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