Contrarian investment philosophy in the American stock market: on investment advice and the crowd conundrum

Abstract

This paper contributes to the understanding of the role of crowds in the financial market by examining the historical origins and theoretical underpinnings of contrarian investment philosophy. Developed in non-scientific, practice-oriented ‘how to’ handbooks in 1920s and 1930s America, contrarian investment advice was aimed at so-called small investors rather than well-established market practitioners. Emerging out of late-nineteenth- and early-twentieth-century debates about public participation in the stock market, the contrarians expanded on a widely held (amongst financial writers) scepticism about the investment and speculation skills (or lack thereof) of the masses and adopted ideas from the theoretical discipline of crowd psychology, whereby they positioned the mass (i.e. the crowd) in opposition to the successful investor. I argue that despite its idiosyncrasies, the contrarians’ conception of the market based on crowd psychology points to a fundamental fragility of market participants, which still lingers on in recent debates about the wisdom of financial market crowds.     

Public employees lining up at the polls—the conditional effect of living and working in the same municipality

Do public employees vote more frequently than private employees? The turnout of public employees has been of central interest to public choice scholars for almost a century. Utilizing a government records dataset that is not subject to over-reporting and differential social desirability bias, we find that public employees voted 11–12 percentage points more than their counterparts in the private sector. In a multivariate analysis, however, the effect is only four to five percentage points greater for local government public employees, which is in the lower range of previous studies. We are able to distinguish between local government and central government employees and show that the latter vote two percentage points less than the former. Controlling for the specific type of educational background does not explain the public–private turnout differential. Finally, the effect of working and voting in the same municipality is larger for local government employees than other citizens. This is in accordance with their greater incentives as they elect their future employer, though the effect size is surprisingly small.     

Polity Size and Local Political Trust: A Quasi‐experiment Using Municipal Mergers in Denmark

This article examines the relationship between polity size and political trust in local government for which two schools of thought offer opposing expectations. The theoretical disagreement has received considerable attention and this article contributes with a dynamic perspective of how changes in polity size affect changes in citizens' political trust on the input‐side of local government. The case examined is the recent municipal mergers in Denmark which were implemented on 1 January 2007. The article reports an analysis of a panel based on a repeated survey of Danish citizens using an untreated control group design with pre‐test and post‐test. A quasi‐experimental difference‐in‐difference identification strategy is used to obtain the effect of municipal size on local political trust. The results show that changes in municipal size negatively affect local political trust, which is consistent with the expectation from the political economy theory that political trust tends to decrease with the size of the polity.     

Reforming the French welfare state: Solidarity,social exclusion and the three crises of citizenship

The article explores recent debates about citizenship and social provision in France. It examines the essential concepts comparable to ‘social citizenship’, as understood in British debates, and the role that they have played in the development of the French welfare state. Its conclusions are threefold. First, social provision in France is founded on the principle of solidarité, which holds that all citizens face a series of social risks (unemployment and illness) that make them dependent on one another. Second, as the traditional insurance principle (the core of the French welfare state) is founded on socio‐economic conditions (concerning the nature of social interdependence and social risk) that no longer exist, the emergence of these social ills has led to not one but three crises of citizenship: a crisis of coverage, of legitimacy and of participation. Third, while it is too early to draw definitive conclusions, recent policy reforms suggest that the difficulties faced by French welfare are encouraging moves towards the British model of tax‐based (rather than insurance‐based) financing of social provision.     

Livestock and Private Tree Holdings in Rural Ethiopia: The Effects of Collective Action Institutions,Tenure Security and Market Access

This article uses househld panel data spanning the period 2000–2007 to test hypotheses from the literature that secure land tenure, market access and collective action promote accumulation of private capital assets in rural highland Ethiopia. The three natural capital assets analysed in the article, livestock, eucalyptus trees and non-eucalyptus trees on households’ farm plots, make up virtually 100 per cent of privately held disposable assets. Incomes and capital stocks are extremely low and constant and tree assets are at least as important as livestock. We find that collective action and secure land tenure have strong positive effects on accumulation of livestock and other trees, but not eucalyptus. We also find evidence that market access promotes eucalyptus holdings and that other types of wealth tend to be positively associated with private natural capital stocks.     

Campaigns Matter: How Voters Become Knowledgeable and Efficacious During Election Campaigns

Election campaigns are more than simple competitions for votes; they also represent an opportunity for voters to become politically knowledgeable and engaged. Using a large-scale Web panel (N ≈ 5,000), we track the development of political knowledge, internal efficacy, and external efficacy among voters during the 2011 Danish parliamentary election campaign. Over the course of the campaign, the electorate’s political knowledge increases, and these gains are found across genders, generations, and educational groups, narrowing the knowledge gap within the electorate. Furthermore, internal and external efficacy increase over the course of the campaign, with gains found across different demographic groups, particularly narrowing the gaps in internal efficacy. The news media play a crucial role, as increased knowledge and efficacy are partly driven by media use, although tabloids actually decrease external efficacy. The findings suggest that positive campaign effects are universal across various media and party systems.     

Automated washing of FTA Card punches and PCR setup for reference samples using a LIMS-controlled Sias Xantus automated liquid handler

We have implemented and validated automated methods for washing FTA Card punches containing buccal samples and subsequent PCR setup using a Sias Xantus automated liquid handler. The automated methods were controlled by worklists generated by our LabWare Laboratory Information Management System (LIMS). The protocols were validated according to EN/ISO 17025 for use with STR amplifications kits AmpF?STR^® Identifiler^® and Y-filer^® (Applied Biosystems).     

Testing the Use of Pigs as Human Proxies in Decomposition Studies

Pigs are a common human analogue in taphonomic study, yet data comparing the trajectory of decomposition between the two groups are lacking. This study compared decomposition rate and gross tissue change in 17 pigs and 22 human remains placed in the Forensic Investigation Research Station in western Colorado between 2012 and 2015. Accumulated degree days (ADD) were used to assess the number of thermal units required to reach a given total body score (TBS) (1) which was used as the measure of decomposition. A comparison of slopes in linear mixed effects model indicated that decomposition rates significantly differed between human donors and pig remains χ²₍₁₎ = 5.662, p = 0.017. Neither the pig nor the human trajectory compared well to the TBS model. Thus, (i) pigs are not an adequate proxy for human decomposition studies, and (ii) in the semiarid environment of western Colorado, there is a need to develop a regional decomposition model.     

Trends in victimization in schools and elsewhere, 1974–1981

Trends in the rate of victimizations of juveniles in three settings-schools, homes, and streets/parks-are examined monthly during the period 1974–1981. The relationship between in-school victimization rates and those occurring outside of school are analyzed with multivariate ARMA models informed by previous research on school victimization (Gottfredson and Gottfredson, 1985) and an importation perspective on the source of crime and victimization in institutions such as schools. Results indicate that the overall in-school victimization rate remained relatively stable during this period but that victimization rates of juveniles in other settings had significant effects on in-school victimizations. This suggests that underlying causes of victimization in general are important determinants of victimization in schools. These results are limited, however, as we examine these sources of victimization only indirectly via relationships among the different victimization rates in dynamic models and by the aggregate nature of the monthly data from the National Crime Survey.