Filipe R Costa

Using the 52-Week High To Build a Momentum Strategy

Using the 52-Week High To Build a Momentum Strategy

8 mins. to read

Unlike what Eugene Fama and other efficient markets supporters seem to believe, investors are human, endowed with limited rationality and scarce resources. The human brain just can’t process all financial information that is available in the market at all times, because its capacity is limited. Investors must make investment decisions with incomplete information and there…

Emerging Markets Crisis?

Emerging Markets Crisis?

8 mins. to read

While everyone is concentrating in Greece and the actions taken by the US Federal Reserve, Emerging Markets are collapsing silently. The cracks in the developing economies are deeper than most realise and the risk of a 1997-like currency crisis may catch many by surprise in a not-so-distant future. Instead of achieving a strong financial position,…

Declines In Chinese Stocks Are Just the Beginning

Declines In Chinese Stocks Are Just the Beginning

6 mins. to read

Eugene Fama has spent his life collecting evidence and theorising markets’ rationality. He believes that even if there are some naive investors in the market, who just trade for the sake of it, there is at least one group of informed investors that will drive prices to fundamental values and eliminate any price distortions. Under…

You Got (Almost) Everything Wrong About Our Economy, Mr Krugman

You Got (Almost) Everything Wrong About Our Economy, Mr Krugman

8 mins. to read

I wish our economy could be illustrated in a simple mathematical model where the increase in GDP would be a linear and precise function of the increase in something else under our control. I wish the central bank could print money for us to keep our spending habits without having to work. I wish Paul…

Fund Manager in Focus – Paul Singer

Fund Manager in Focus – Paul Singer

12 mins. to read

As featured in this month’s Master Investor Magazine. “We like to create value rather than merely identify it…if we just identify value, we can’t make money unless the market moves the security in the predicted direction.” ― Paul Singer A Non-consensual Man This month’s hedge fund manager in focus has some peculiar characteristics that make…

Are Litigation Finance Investments the Ultimate Diversification Tool?

Are Litigation Finance Investments the Ultimate Diversification Tool?

9 mins. to read

As featured in this month’s Master Investor Magazine. “To reduce risk it is necessary to avoid a portfolio whose securities are all highly correlated with each other. One hundred securities whose returns rise and fall in near unison afford little protection than the uncertain return of a single security.” – Harry Markowitz, 1968 Early Days…

When Will The Fed Hike Rates?

When Will The Fed Hike Rates?

8 mins. to read

We live in strange times in terms of economic reasoning and thinking. One Nobel laureate economist believes that saving is public enemy number one, as it prevents economies from growing, hence he preaches the virtues of macro policies aimed at leading people to spend whatever they produce, and eventually a little extra if they can…

Is Gold a Good Insurance Asset?

Is Gold a Good Insurance Asset?

6 mins. to read

Unlike the foreign exchange markets, where traders expect their bets to move vividly when the Fed puts an extra comma on its policy statement; unlike the equity markets, where traders expect price panic when Merkel sneezes; unlike commodities markets, where traders expect Armageddon when rainfall increases by one drop per year; in the gold market,…

Do Not Take A Grexit Lightly

Do Not Take A Grexit Lightly

8 mins. to read

After a roller coaster weekend in EU politics, financial markets opened Monday with increased volatility but in certain ways disregarded the political and economic implications of what happened during the weekend. The Greeks said “no” to a new bailout, Yanis Varoufakis was dismissed, the dra(ch)ma is back on the table; but still investors don’t seem…

Sweden is Heading Towards Disaster

Sweden is Heading Towards Disaster

7 mins. to read

Following the Leader It is always entertaining to listen to European officials speaking in a placid tone as if everything were under control. Greece is on the brink of leaving the Euro; austerity policies have wrecked a few peripheral economies; debt levels are higher than before the financial crisis; and output growth is languishing. But…