Gertjan Verdickt

Large language models may seem brilliant at making predictions, but often it’s just memorization. And that has implications for investors relying on LLMs for economic analysis.

The decline of value investing is not a recent phenomenon but a process that has been unfolding for over three decades. While many pinpoint its loss of effectiveness around 2007, Baruch Lev and Anup Srivastava demonstrate in their study that the strategy has in fact been structurally underperforming since the late 1980s. The key question is therefore: is value investing dead, or merely in a deep hibernation?

At the heart of financial research lies a seemingly simple question: what is the risk-return profile of stocks and corporate bonds? New research based on the Belgian stock market from 1850 to 1913 shows that the answer changes fundamentally when illiquidity is taken into account.

Warren Buffett took a step back from Berkshire Hathaway this week. The end of an (amazing) era.

In a world where artificial intelligence (AI) is increasingly permeating the financial sector, institutional investors are understandably asking the question: how much does ChatGPT really know about finance? The answer is more nuanced than many might expect.

The carry trade is a well-known currency trading strategy that has gained huge popularity among investors and traders in recent years.

Investors err in assessing stock returns. Prominent outliers attract undue attention and garner more interest than stocks with market-average returns. However, such stocks don’t necessarily make better investments; in fact, this strategy results in reduced returns for investors.

One of the elements that Bitcoin investors cite is the cryptocurrency’s performance when the stock market is doing poorly. These coins are then often described as a “flight-to-safety” investment: an asset that rises in value when the rest of the portfolio goes down. Is this really the case?

The wine world was taken by surprise in 1976: Steven Spurrier, the British wine merchant, had a jury of experts taste a series of French and American wines blind. To everyone’s surprise, the United States won gold twice in the categories of Chardonnay (California vs. Burgundy) and Cabarnet Sauvignon (California vs. Bordeaux).

One of the most important functions of a financial system is to bring together people with an abundance and a shortage of capital. Financial markets can efficiently bring innovative companies and investors together. This has a positive effect on the real economy – think of employment and competition (in the form of lower consumer prices).