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Growth Capex, Maintenance Capex, and PP&E Numbers
(Editor’s note: Today we’re delighted to introduce a new monthly column on the Calcbench blog that will explore financial analysis issues, written by Jason Apollo Voss — investment manager, financial analyst, and these days CEO of Deception and Truth Analysis, a financial analytics firm. Enjoy, and be sure to see our companion spreadsheet to help you explore the concepts Voss talks about.) By Jason Apollo Voss, CFA In today’s world where the biggest assets on the balance sheets of the most successful firms are all about intangible assets, you...
read moreFraud and Deception Detection: Five Language Fingerprints
Last month, I described how computer-aided text-based analysis can help uncover fraud and deception in company communications. But what other insights can we glean from this research into scandal companies? We used Deception And Truth Analysis (D.A.T.A.) to examine 10 of the largest corporate scandals in recent history and found that the average lead time between our textual identification of deception and the public recognition of possible scandal was more than six years. The obvious question is why. Why does it take regulators...
read moreFraud and Deception Detection: Text-Based Analysis
Research analysis relies on our trust. Among the many factors we consider as fundamental investors are assessments of a company’s strategy, products, supply chain, employees, financing, operating environment, competition, management, adaptability, and so on. Investment professionals conduct these assessments to increase our understanding, yes, but also to increase our trust in the data and the people whose activities the data measure. If we cannot trust the data and the people who created it, then we will not invest. In short, we...
read more15 February 2021: Deception And Truth Analysis (D.A.T.A.) Launched
Perhaps the biggest personal announcement from me in a long while, a new product that I have been working on for years, Deception And Truth Analysis (D.A.T.A.) is LIVE. D.A.T.A. is computer-based text analysis of deception with a 99.997% improvement in speed, and a greater than 40% increase in accuracy, and with a 90% cost savings. To find out more about this game-changing product, check out these resources: CFA Institute’s Enterprising Investor article, just published today: Fraud and Deception Detection: Text-Based Analysis. The...
read more2 February 2021: A THEORY OF BEHAVIORAL FINANCE Published
For those of you that followed with interest the publication of my series of A Theory of Behavioral Finance articles from November 2020 through December 2020, I have just assembled all of that material into a single downloadable whitepaper. This is not just a compilation of those articles because I have updated the articles with additional information, as well as clarified a points based on feedback I received. Download your free copy and if you like it, share A THEORY OF BEHAVIORAL FINANCE with your colleagues. For those of you unfamiliar...
read moreA Theory of Behavioral Finance – Predictions
A little over six weeks ago I published A Theory of Behavioral Finance. Subsequently, I have been considering each of the high level points of the Theory in greater detail in individual articles. Today’s article about the Predictions of a Theory of Behavioral Finance concludes this series. I am combining these pieces into a larger whitepaper that is soon to be available for download. In the overarching Theory I said that there were two broad predictions, and now I am adding in multiple sub-predictions. Importantly, for a theory to be...
read moreA Theory of Behavioral Finance – Assumptions 5 and 6 – Final Factors
A little while ago I published A Theory of Behavioral Finance, and subsequently I have been exploring each of my assumptions in greater detail. Of those foundations the first four deserved entire articles. Whereas assumptions 5 and 6 can be combined into a single piece. Next week I conclude the whole enterprise (just in time for the Holy Days) by exploring the predictions that may be made based on the Theory. Here are the two remaining assumptions as described in the Theory: Behavior is biased away from self-aware and intellectual responses...
read moreA Theory of Behavioral Finance – Assumption 4 – Sociological Factors
Over the last several weeks we have been exploring A Theory of Behavioral Finance. So, far I have provided a high-level overview of the theory, as well as a discussion of two of the parents of behavioral bias: biology and psychology. In this article I discuss the sociological factors that lead to our errors in judgement. For convenience, here are the sociological factors that I outlined previously: Sociological factors affecting human behavior include: Safety Group feedback that is either positive or negative about attitudes,...
read moreA Theory of Behavioral Finance – Assumption 3 – The Psychological Factors
Several weeks ago I authored A Theory of Behavioral Finance, which was a high-level presentation of the Theory. I promised to cover each assumption more in-depth. This week I describe in greater detail the Psychological Factors that contribute to behavioral biases. In that original piece I said these factors included: Psychological secondary factors affecting human behavior include: Behaviors and habits formed based on: Goals/needs being attained, but relative to energy conservation; needs include: Physiological needs Safety needs...
read moreA Theory of Behavioral Finance – Assumption 2 – The Biological Factors
For those of you stumbling on this article it is a part of a matrix of pieces making a case for A Theory of Behavioral Finance. This work before you specifically explores with some depth the biological factors that contribute to the arising of behavioral biases. In my theory I said of Assumption 2, biological factors: Biological secondary factors affecting human behavior include: Human biology evolved with a preference to conserve energy and time Instinctual and habitual behaviors are efficient relative to energy conservation Working memory...
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