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.
Most investors assume prices are moved by information: earnings, interest rates, news. A peer-reviewed study of 37 years of Nasdaq data suggests something stranger. The poor returns of speculative 'lottery-like' stocks are concentrated after sunny weather in the cities where the firms are based — and largely vanish after cloudy spells. The finding says less about forecasts than about how quietly mood reaches our decisions, and why rules-based investing exists.
Robin Powell
Jul 96 min read
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