We often assume that market-cap and liquidity go hand in hand. However, that is not always the case. High ticket stocks, like MRF and BRK-A, that trade at six figure per-share prices is less liquid than their peers because retail traders tend to avoid them.
We took a measure of “illiquidity” and applied them to the market-cap classifications we discussed previously to study the impact of changes in classifications on liquidity. Turns out, most changes don’t have any impact.
You can read the whole thing here: Market-cap Classification and Illiquidity
Markets this Week
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
Top Harvard cancer researchers accused of scientific fraud (arstechnica)
The study of Momentum Effect between China and US (SSRN)
Does U.S. Academic Research Destroy the Predictability of Global Stock Returns? (SSRN)
Designing Robust Trend-following System (SSRN)
Why Has Factor Investing Failed? (SSRN)
Investing & Economy
The Three Types of Investing Mistake (behaviouralinvestment)
India
India may keep 2024-25 gross borrowings close to current year's level (reuters)
Exposing the extent of unemployment in India, young people from Haryana, Rajasthan, UP, Bihar and Punjab want to work in Israel. (thewire)
PSUs are running amok with grand ventures, with little regard for their capability or governance. (livemint)
RoW
Why American cities are squalid (unherd)
Organized crime is mining sand from rivers and coasts to feed demand worldwide, ruining ecosystems and communities. (scientificamerican)
How China’s stock rout was 8 years in the making (scmp)
China's residential foreclosures increase 43% in 2023 (reuters)
China’s advanced manufacturing investment stokes trade tensions (afr)
The Reason China Can’t Stop Its Decline (foreignpolicy)
EVs Cost Twice as Much to Insure as Fuel-Burning Cars in UK (bloomberg)
Odds & Ends
The Purpose of Work (disciplinefunds)
Meme of the Week
