Editor’s note: This was originally published in a newsletter by Ben Hunt and is reprinted here with permission. “Tattaglia is a pimp. He never could have outfought Santino. But I didn’t know until this day that it was Barzini all along.” – Don Vito Corleone Like many in the investments business, I am a big fan of the Godfather movies, or at least those that don’t have Sofia Coppola in a supporting role.  The strategic crux of the first movie is the realization by Don Corleone at a peace-making meeting of the Five Families that the garden variety gangland war he thought he was fighting with the Tattaglia Family was actually part of an existential war being waged by the nominal head of the Families, Don Barzini. Vito warns his son Michael, who becomes the new head of the Corleone Family, and the two of them plot a strategy of revenge and survival

Editor’s note: This was previously published at The Augmented Trader and is reprinted here with permission. Dr. Balch will be a presenter at the MTA Annual Symposium in April. This paper demonstrates how he applies insider transaction trader and offers a detailed look at is thought process. Overview Lucena Research has evaluated the InsiderInsights Company Ratings database as an information source for an event-based study. In this white paper we provide a brief background concerning insider trading information, implement an event study with the data and conclude with back tests to assess the effectiveness of the information in trading. Overall, our analysis shows that the data provided by InsiderInsights has persistent and meaningful value. Background on insider trading information (The information in this section is excerpted from the book “Profit from Legal Insider Trading”) It should come as no surprise to anyone that insider trading occurs every day in the stock market. What might surprise investors

The NY Federal Reserve has an equity research department. Their research department determined in 2013 that “stocks are cheap” and investors should enjoy “excess high returns” in an abnormally low or negative real interest rate environment for the next five years through 2018. Before reviewing potential mean reversions, implications from the Year of the Horse, & George Lindsay’s bearish Three Peaks and Domed House model, let’s attempt to quantify the NY Fed models and determine how high the Dow Jones might climb if it is to enjoy “excess high returns” through 2018. Goldman Sachs research team, based on their earnings growth models, forecasts the S & P 500 to rally a modest 19% to 2200 by 2016 from the 2013 close. That amounts to roughly 6% annualized returns for the next three years in US equities, an amount that hardly qualifies as “excess high returns.” The two behavioral models shown below suggest