Knowledge Leaders

Machine Learning to the Rescue November 01, 2018

Posted by Baruch Lev in Guest Author, Knowledge Leaders

My previous blog post (“Beware! Estimates Dominate Financial Reports,” October 13, 2018) alerted you the hidden secret of accounting: Most balance sheet and income statement items are based on managerial subjective estimates and projections (like depreciation, asset write-offs, bad debts, expected gain on pension assets, etc.). The…

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Estimates Are Hazardous to Your Wealth. Everyone knows that accounting is boring (not when I teach it, though), but, at least, people think it’s factual. No fake news. After all, accounting comes from counting―counting money, units of inventory, etc. All facts. Nothing further from the truth. Except…

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Spotlight: Inside Prada’s Knowledge Workshop September 11, 2018

Posted by Knowledge Leaders Team in Knowledge Leaders

For decades, the fashion industry has tried to explain the elusive magic of the Prada brand. “Some designers are seekers of trends, but Prada actually is the trend, season after season,” the New York Times Magazine wrote. And this summer, when Jeff Goldblum appeared on…

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A New Super Factor: the Investment Case for Knowledge August 14, 2018

Posted by Bryce Coward, CFA in Knowledge Leaders

We’re pleased to share a new white paper on the market anomaly that rose above value, size, quality, low volatility and momentum factors. Written by Bryce Coward, CFA, the study details the results of first market test of the Knowledge Effect, the tendency of highly innovative companies to deliver excess…

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Who Reads Financial Reports? Nobody! August 01, 2018

Posted by Baruch Lev in Guest Author, Knowledge Leaders

For several years I have argued, based on comprehensive statistical evidence, that corporate financial reports―quarterly and annual statements―have lost most of their relevance and usefulness to investors. Corporate earnings, in particular, are no longer a reliable measure of enterprise value change, nor are they indicators…

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