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Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic (Marginal Revolution, 1 min read) New findings reveal stocks with the ‘greatest partisan disagreement’ had more trading volume and explain 20% of the increase in market volume during the COVID crisis. Also, Republican supporters were more optimistic about equities relatively.
A Brave New World for Value Investing (In the Long run, 6 min read) ‘Supply chains will shorten and diversify’ due to growing geopolitical factors influencing trade policy and the aftereffects of COVID. This robustness will come at a cost: firms will either increase the price or face reduced corporate profits. In this backdrop, ‘value-based investment analysis will be the best guide’ for investors. [Bullish value style]
Housing Markets and the COVID-19 Crisis (Econofact, 5 min read) The US Housing market was in better shape heading into this crisis relative to 2008. Recent data shows some recovery (YoY price growth has fallen but remains positive), but the way in which individual states deal with postponed mortgage payments will determine the level of defaults and market recovery. [Bearish housing]