Forecasting stock returns using model-selection criteria

This paper examines the economic significance of return predictability in Australian equities. In light of considerable model uncertainty, formal model-selection criteria are used to choose a specification for the predictive model. A portfolio-switching strategy is implemented according to model predictions. Relative to a buy-and-hold market investment, the returns to the portfolio-switching strategy are impressive under several model-selection criteria, even after accounting for transaction costs. However, as these findings are not robust across other model-selection criteria examined, it is difficult to conclude that the degree of return predictability is economically significant.

40Ar/39Ar geochronological constraints on the evolution of lateritic iron deposits in the Quadrilatero Ferrifero, Minas Gerais, Brazil

Weathering profiles overlying the Sapecado, Pico and Andaime iron ore deposits, Quadrilátero Ferrífero (QF), Minas Gerais, Brazil, reach depths of 150–400 m and host world-class supergene iron orebodies. In addition to hosting supergene ore bodies of global economic significance, weathered banded iron-formations at the Quadrilátero Ferrífero and elsewhere (e.g., Carajás, Hamersley) are postulated to underlie some of the most ancient continuously exposed weathering profiles on earth. Laser incremental-heating 40Ar/39Ar results for 69 grains of hollandite-group manganese oxides extracted from 23 samples collected at depths ranging from 5 to 150 m at the Sapecado, Pico and Andaime deposits reveal ages ranging from ca. 62 to 14 Ma. Older Mn-oxides occur near the surface, while younger Mn-oxides occur at depth. However, many samples collected at the weathering–bedrock interface yield ages in the 51–41 Ma range, suggesting that the weathering profiles in the Quadrilátero Ferrífero had already reached their present depth in the Paleogene. The antiquity of the weathering profiles in the Quadrilátero Ferrífero is comparable to the antiquity of dated weathering profiles on banded iron-formations in the Carajás Region (Brazil) and the Hamersley Province, Western Australia. The age versus depth distributions obtained in this study, but not available for other regions containing similar supergene iron deposits, suggest that little further advance of the weathering front has occurred in the Quadrilátero Ferrífero lateritic profiles during the Neogene. The results suggest that weathering in some of these ancient landscapes is not controlled by the steady-state advance of weathering fronts through time, but may reflect climatic and geomorphological conditions prevailing in a remote past. The geochronological results also confirm that the ancient landsurfaces in the Quadrilátero Ferrífero probably remained immune to erosion for tens of millions of years. Deep weathering, mostly in the Paleogene, combined with low erosion rates, account for the abundance and widespread distribution of supergene iron, manganese, and aluminum orebodies in this region.