EQUITY GPS equity investment decision support service is based on a few reasonable hypotheses:

  • Equity markets offer temporary pockets of inefficiencies even though they are broadly efficient over the long term
  • A significant proportion of market participants structurally underperform
    • Individual investors, corporates dealing in their own stock, governments nationalising or privatising, do not always behave rationally, whilst they in aggregate represent a significant proportion of listed companies' capital structure. 
    • Professional active asset managers have difficulties outperforming their benchmarks : on average, the majority underperforms over the long term 
  • Rational active investors have no other choice but to accept market inefficiencies and to view them as opportunities to be taken advantage of 
  • Behavioral Finance provides a strong academic groundwork that helps understand why market participants may create temporary price inefficiencies. Its findings - prevalent behavioral, psychological or emotional biases that stand in the way of reasonable investing - are consistent with the highly successful pragmatic intuitions of Benjamin Graham, founder of the discipline of Equity Portfolio Management 80 years ago
Last update : 08/05/2019