Investment advice for a bear market

Steve Bainbridge has some investment advice for a bear market. It’s pretty complicated and involves reading a book. So you might consider Jeff Lipshaw’s post showing that firms with “good governance” scores did the worst since last October – worse than the S & P, worse than the NYSE, worse than the DJI.

Actually, it’s not so surprising, if you regard “good governance” as endogenous (see Hermalin & Weisbach), so the direction of causation runs from bad performance to good governance.

In any event, the advice implicit in Jeff’s post is easy to follow: as soon as you see that a corporation is adopting good governance practices, sell.