Professional investors are required to chase trends
“Many investors are professionally required to ‘pay attention’ to the latest trend for fear of missing out (pay attention and be invested!).”
Business
How expensive shares become very expensive
“[The dominant dynamic] is momentum investing and is the mechanism by which expensive shares become very expensive, just as cheap shares may become very cheap.”
Markets punishing sensible firms create opportunities
“In effect the company had been punished by the markets for being sensible. It is this behaviour that gets us excited and sets up investment opportunities.”
Lease accounting leaves cash flow unchanged
“It is important to note that whether a transaction is deemed an operating lease or a sale-type lease, cash-flow is unaffected.”
Earnings bonuses encouraged booking profits up front
“One can therefore understand how management, plump with stock options and growth in earnings per share related bonuses, were strongly incented to recognise earnings up front and SFAS 13 allowed them to do this.”