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Neat fact: the publishing of this article has caused its headline to stop being true. Since CEO equity vesting schedules are public, all it takes is a few algor
by jimrandomh 9y ago
Neat fact: the publishing of this article has caused its headline to stop being true. Since CEO equity vesting schedules are public, all it takes is a few algorithmic traders acting on this to make the strategy stop working.
- wqnt 9y agoAlgorithmic traders focus on short-term market movements. The investment decisions described in the study are about long-term foundamental of companies. As long as enough investors prefer cash flow to capital reinvestment on the earning report, the strategy will continue to work. Cutting costs and investments can easily dress up short-term financial performance at the cost of long-term productivity. But it will look good for investors who don't understand the underlying matter and rely on simplistic metrics to make investment decisions.
- Spooky23 9y agoI hate to break it to you, but this isn't exactly a revelation.
- spaceflunky 9y agoIs that really true though? How do you know?