Nobody can establish who first used the phrase 'evidence-based investing', and no regulator defines it. Robin Powell, who was given the name by Larry Swedroe in 2015 and is sometimes wrongly credited with coining it, sets out what it actually means: four tests of what counts as evidence, borrowed from a medical parallel that hit the same crisis twelve years ago. Including where he goes further than a global tracker, and why he holds that position less firmly than he used to.
A new working paper has documented the largest price inefficiency ever found in the stock market: a pure-news signal with a Sharpe ratio of 3.1, more than double any known factor. But the researchers used a frontier AI model, millions of news articles and institutional trading costs to find it — and the same evidence that shows markets are inefficient also shows why an ordinary investor still can't beat them.
Robin Powell
Jun 199 min read
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