Gold reached an all-time high in January 2026, and everyone has an explanation. Inflation. Deficits. Central banks. Geopolitics. The problem is that they’re all partially right. Gold is weird. It plays many different roles, and depending on which one you focus on, you can convince yourself of almost anything. Gold is: an inflation hedge a […]

The disposition effect is one of the most robust findings in empirical finance. Investors sell winners too quickly and cling to losers for too long (a recent blog discussed how this makes sense in an evolutionary context). But the behavior lines up neatly with the S-shaped value function of prospect theory, so tying the two […]

Investors like to believe they understand the relationship between the stock market and the economy. It gives them a chance to sound smart and justify their subscriptions to the Wall Street Journal. The story is “obvious”. If the economy is doing well, companies make more money, and stocks go up. If the economy is struggling, […]

Spring cleaning is one of those phrases people use when they want to make something dull sound virtuous (or is spring cleaning just something done on farms and in TV shows?). In domestic terms it might mean swapping over a wardrobe or mopping out the hallway. But there is a market related point inside the […]

We wrote recently about the danger of conditional truths. Investors have a habit of compressing complicated relationships into absolutes. “Oil up, stocks down” is one of the more persistent ones. It sounds right and makes sense, at least superficially. Chemicals from oil turn up in plastics, cosmetics, medicines, fertilizers and a lot of other unexpected […]