Understanding Market Volatility: What History Teaches Us About Turbulent Times
Bridgeway Capital’s head of research, Andrew Berkin, analyzed U.S. equities from July 1963 through early 2025 to assess how markets behave during and after volatility spikes. He found that while volatility spikes—such as the April 2025 VIX surge to over 50—are sharp and brief, they typically precede a rebound, with the month after a spike delivering an average 1.23% return versus a -1.05% loss during the spike. Performance varies by factor: small‑caps lose the most, whereas value, quality and high‑dividend stocks hold up better. The study recommends disciplined, diversified, factor‑based portfolios and systematic rebalancing rather than panic selling.
The R&D Premium: Why Innovation-Intensive Stocks Outperform
A new study of S&P 500 firms from 1995‑2025 finds that companies in the top 20% of R&D intensity generate an average 3.73% higher annual return than low‑R&D peers. The premium holds across large, mid, and small caps and survives after...
The Hidden Risk on Company Balance Sheets
Professors Darrol Stanley and Michael Kinsman examined whether S&P 500 companies with unusually high goodwill and intangible assets perform differently from their peers. Analyzing 399 firms that stayed in the index from late 2018 through 2023, they split the sample...
Momentum Trading Meets AI
Researchers led by Dmitry Garmash demonstrated that large language models can enhance the execution of classic momentum strategies by incorporating volatility targeting and news sentiment analysis. Applying volatility targeting lifted the Sharpe ratio from 0.53 to 0.97 and reduced maximum...
Understanding What Really Drives Expected Investment Returns
A new October 2025 paper examined Capital Market Assumptions from 45 major institutions that manage roughly $37 trillion and advise over 70% of U.S. public pensions. Analyzing forecasts from 2001‑2022, the authors found that perceived risk explains about 90% of the...
Why 'New' Value Stocks Outperform: The Hidden Driver Of Value Investing
A January 2026 paper by Linda Chen, Wei Huang and George Jiang finds that roughly half of the stocks classified as value or growth each year are “new” entrants, having switched categories after a two‑year gap. The authors show that the...
The Incredible Structural Alpha
The study “The Incredible Structural Alpha” by Andrew Berkin and Christine Wang argues that alpha is not dead but hidden in portfolio construction. Using a 60‑year U.S. equity sample (July 1963‑June 2023) they re‑examined the classic 5 × 5 size‑value grid popularized by Fama...
The Best Defense: What 222 Years of Data Reveals About Protecting Your Portfolio
Over two centuries, the classic 60% stock/40% bond mix delivered roughly 7% annual returns but suffered drawdowns exceeding 71%. A new study covering 1800‑2021 evaluated dozens of defensive tactics and identified Defensive Absolute Return (DAR4020) and multi‑asset trend‑following as the...
PIK (Payment-in-Kind) in Private Credit
Payment‑in‑Kind (PIK) interest lets borrowers defer cash payments by issuing additional debt or equity. When used deliberately, PIK conserves liquidity for growth, acquisitions, or seasonal needs while the underlying business remains strong and protected by caps, toggles, and pricing premiums....
Why Earnings Beat Cash Flow for Long-Term Investment Decisions
A new January 2026 study by McInnis, Silva and Yu shows that while free cash flow predicts short‑term cash generation, earnings become the superior predictor of cash flows over 9‑20‑year horizons. The researchers attribute this reversal to investment accruals, which...
Private Credit Defaults
The episode dissects private‑credit defaults, arguing that most defaults are driven by borrower‑specific (idiosyncratic) factors rather than systemic risk, which the media often exaggerates for clicks. Data from the Cliffwater Direct Lending Index shows realized losses remain well below historic...
The BlackRock TCPC Story
The episode dissects BlackRock TCPC’s recent 19% NAV drop, revealing that the loss was driven by six concentrated positions heavily weighted in second‑lien loans and equity rather than first‑lien senior debt. The host contrasts this risky capital‑structure positioning and volatile...
The Hidden Cost Of Investment Income
The episode explores a new Longview Research Partners analysis that challenges the traditional view of bond interest and REIT dividends as portfolio positives, showing that forced investment income can erode over 1% of after‑tax wealth for high‑net‑worth investors. The hosts...
Understanding Peer Momentum
The episode explores "peer momentum," the idea that a stock’s future returns can be better predicted by the recent performance of its connected firms—not just its own past returns. Research shows that using industry‑level peer momentum yields annualized return spreads...
How Your Brain’s “Break-Even” Bias Creates Mispricings
In this episode, Larry Swedroe discusses a new study by Jihoon Goh, Suk‑Joon Byun, and Donghoon Kim that uncovers how the “salience effect”—investors’ attraction to stocks with dramatic past moves—interacts with the “break‑even bias,” a tendency to take riskier bets...
