A concise look in three unrelated, yet complex environments reveals a strong human dependence on the recognition heuristic. Its marketability to the mind as a good decision making tool (over other complex approaches), is shown to be almost innate and ultimately successful. The three...

Financial markets provide a natural quantitative lab for understanding some of the most advanced human behaviours. Among them is the invention and use of mathematical tools known as financial instruments. Besides money, the two most fundamental financial instruments are bonds and equities. More...

Securities selection attempts to distinguish prospective winners from losers conditional on beliefs and available information. This article surveys relevant academic research on this subject, including work about the combining of forecasts (Bates and Granger 1969), the Black-Litterman model...

This paper introduces a new non-parametric approach to integrate empirical probability functions of the real return for different investment horizons for five portfolios of Swedish stocks and bonds. In our setting the problem reduces to generating new generalizations from an empirical Markov...

This paper introduces a new non-parametric approach to integrate empirical probability functions of the real return for different investment horizons for five portfolios of Swedish stocks and bonds. In our setting the problem reduces to generating new generalizations from an empirical Markov...

Factor investing has gained widespread acceptance among institutional investors. Some investors believe it is preferable to stratify the investment universe into factors to manage portfolio risk more effectively, while other investors focus on factors because they believe they yield risk...

I develop a method to identify the strongest determinants of expected returns among potentially infinite return predictors. Instead of sorting stocks on characteristics, I sort stocks into portfolios based on their realized returns---the variable of interest---at each month in the past and find...

We extract contextualized representations of news text to predict returns using the state-of-the-art large language models in natural language processing. Unlike the traditional bag-of-words approach, the contextualized representation captures both the syntax and semantics of text, thus...

This paper introduces a new non-parametric approach to integrate empirical probability functions of the real return for different investment horizons for five portfolios of Swedish stocks and bonds. In our setting the problem reduces to generating new generalizations from a known empirical...

We develop a behavioral theory of real options that relaxes the informational and behavioral assumptions underlying applications of financial options theory to real assets. To do so, we augment real option theory's focus on uncertain future asset values (prospective uncertainty) with feedback...