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Educating Investors
The Brandes Center explores how investment opportunities evolve in global markets and offers guidance on how to make rational investment decisions more consistently.
Video Showcase
The Brandes Center's Video Gallery is a collection of videos showcasing the Center's initiatives, thought-provoking discussions, and research summaries designed to engage, challenge, and inspire practitioners to think beyond conventional boundaries.
Featured Video: Counterproductive Sustainable Investing
Many existing sustainable investing strategies seek to drive capital away from so-called "brown" firms in hopes of turning them "green." Such strategies, however, may make brown firms more brown without making green firms more green. Brandes Center Call for Papers Prize Winners Dr. Sam Hartzmark and Dr. Kelly Shue discuss their research.
Investing in the Social Media Age
A panel of experts address fake news and how investors might protect themselves against it. They look at "sentiment" vs. "attention" in social media posts and how investors might profit from understanding the difference. And they explore the dangers of echo chambers when investing and share some tips designed to protect investors.
US-China Panel Discussion
Dr. Victor Shih and Louis Lau, CFA discuss US-China policy, macroeconomic developments and investment opportunities.
Endowment Model Discussion
Amid rising interest rates and an uncertain market environment, investors may be wondering about how best to position their portfolios to reach long-term goals. Bob Maynard advocates a simple approach largely centered on publicly traded stocks and bonds. Steve McCourt contends the “Endowment Model” offers a better alternative given its reliance on less-liquid securities such as private equity and debt, hedge funds, real assets and/or alternatives. Our panelists debate aspects of each approach and share specific tactics for portfolio construction.
Value Investing
Value investors constantly evaluate the relationship between price and value when making decisions to buy, sell or hold.
Over the long term, markets tend to price securities in line with their values — but not always in the short term. When prices for assets such as stocks and bonds “disconnect,” opportunities are created for courageous, patient investors who trust their analysis of business fundamentals. By constantly comparing price with value, investors may uncover tremendous opportunities for profit — and potentially limit their risk as well.
In collaboration with academics and practitioners, our research focuses on how investors may apply value investing while guarding against the damaging effects of behavioral biases in decision-making.
Value Investing Research
February 2022
Has the First Shoe Dropped
September 2019
Are Balance Sheets Wrong?
Behavioral Finance
The efficient markets hypothesis contends prices for assets such as common stocks almost always accurately reflect the underlying business values.
However, recent work shows that security prices often reflect investor sentiment. People may become overly enthusiastic about a company and push its price well above what the business is actually worth. We’ve seen this dynamic throughout history with various “bubbles” in the United States, including housing in 2007 and internet stocks in 1999. But those bubbles can occur with individual securities as well.
People also may get fearful and drive prices well below assets’ underlying values. We saw that most recently in March 2020 at the onset of the COVID-19 pandemic. These swings in price — both up and down — create opportunities for the rational investor focused on fundamental analysis.
We think of behavioral finance as the study of decision-making applied to investing. Over the last few decades, researchers have documented a number of cognitive or emotional errors investors sometimes make when buying or selling assets. By investigating such mistakes, we strive to raise awareness of their wealth-damaging potential. We also seek to offer tools and tactics to help investors avoid such mistakes with future decisions.
At The Brandes Center, our goal is to leverage existing behavioral finance research or sponsor new studies in order to share practical guidance that helps investors make rational decisions and build wealth over the long term.
Behavioral Finance Research
Long-Term Thinking
In his book, The Intelligent Investor, Benjamin Graham wrote, “The true investor scarcely ever is forced to sell his shares.” Graham, widely considered the father of value investing, was underscoring the importance of a patient approach to investing in stocks and bonds. He added that by succumbing to short-term swings in markets, an investor could transform “… his basic advantage into a basic disadvantage.”
Investigating business values and holding positions with a long-term perspective distinguishes the investor from the speculator. But are Graham’s tenets still applicable?
The Brandes Center seeks to compare and contrast short- and long-term perspectives, weighing advantages and drawbacks of both in areas such as risk management, asset allocation and alpha generation.
Long-Term Thinking Research
October 2023
Robo Advisors: Democratizing Wealth Management
July 2022
Illusions of Precision
December 2021
What Makes a Quality Shareholder?
