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Where are the Cheap Firms?
Energy (mostly oil-related) and consumer discretionary (brick & mortar retailers). Cheap–or at least relatively cheap–based on enterprise multiples. The post Where are the Cheap Firms? appeared...
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Where are the Cheap Firms Internationally?
Last week, Wes had a short post entitled, Where are the Cheap Firms? The post showed that when we look at the cheapest stocks in the U.S. stock market, we see that a few industries predominate today,...
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Value Investing Fund Assessment: The Incorrect Approach
US News laundry lists their top 10 “Value Investing Funds,” or Value Investing ETFs, in their recent article: http://money.usnews.com/funds/etfs/rankings/value-funds The criteria (and weighting) for...
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Market Valuations based on CAPE–A Deeper Dive
We have discussed market valuations in the past, but the issue of market valuations was recently raised on CNBC, when Robert Shiller suggested he may shift out of the US and buy Europe. When Shiller...
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Timing Value and Momentum with Valuation-Spreads
We were recently passed along an article suggesting that valuation spreads, or the spread in a valuation metric across the most expensive and least expensive stocks, matters for timing investments. We...
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Which Value Investing Metrics Should You Trust?
Barry has a nice piece in the Washington Post asking a simple question: What is the best valuation metric to assess if a stock is cheap or expensive? Jack and I were honored to see that Barry...
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How Rebalancing Frequency Affects Quality and Value investing funds
Rebalance frequency affects value and quality factors in different ways: Value works better when assessed more frequently Quality factors work about the same, regardless of frequently. Other important...
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Investing in High Dividend Yield Stocks: a Sucker Bet?
Beware of focusing an investment decision on “yield.” In this piece we want to highlight that investing in high dividend yield stocks–without considering the valuation–is probably a BAD idea. We’ve...
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How to Combine Value and Momentum Investing Strategies (Part 1/2)
We are probably most well known for our quantitative value investing strategies. The heart of our strategy is detailed in Wes’ book, Quantitative Value (a reader’s digest version is here). In the...
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Tactical Asset Allocation with Market Valuations: Magic of Myth?
Executive Summary Although it has been very difficult to overcome our initial skepticism, we’ve finally accepted the notion that simple technical analysis may serve as an effective way to manage risk...
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Attention Value Investors: How to Predict Accounting Trickery
Predicting Material Accounting Misstatements Dechow, Ge, Larson and Sloan A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap...
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Are Value Investing and Momentum Investing Robust Anomalies?
Beating a Dead Horse: Value investing and momentum investing work At this stage in our lives we’ve essentially memorized the CRSP/Compustat database. Name an anomaly and we can probably tell you the...
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The Most Important Decision When Selecting a Value Investing Fund
The Best Investment with the Worst Performance We are huge believers in value investing. I personally started off as a fundamental value guy, spending twenty-plus years trying to pick stocks. I...
View ArticleValue Investing: 2014 Value Stock Research Recap
The success and failure of value investing can be boiled down into two components: Buy Cheap Stuff Avoid Behavioral Bias Buy Cheap Stuff Ben Graham outlined the first point in his 1976 article...
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International Value Investing: Looks Like a Reasonable Bet
A Value Investing Premium, Everywhere? A rich body of literature has shown that value investing, or buying stocks that are “cheap” based on a variety of valuation metrics, is robust across different...
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Is Passive Perfect? High Active Share Long-Term Investing Works Better
Patient Capital Outperformance Cremers and Pareek A version of the paper can be found here. Want a summary of academic papers with alpha? Check out our Academic Research Recap Category. Abstract: This...
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How to Combine Value Investing and Momentum Investing (Part 2/2)
A few weeks ago I wrote an article talking about ways to combine value investing and momentum investing. The high level takeaway from that article was to keep value and momentum as separate exposures....
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Book Review – Competition Demystified: a Radically Simplified Approach to...
We’ve spent a lot of time these days thinking about how to identify economic moat, or a firm’s ability to defend against competitive forces in the marketplace. In our search for better understanding we...
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Using Profitability as a Factor? Perhaps You Should Think Twice…
Many investors are getting excited about the so-called “profitability factor,” originally posed by Novy-Marx (here is an alternative story) . Larry Swedroe has a high-level piece advocating the concept...
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High Dividend Stocks and Value Investing
Barron’s recently ran an article (written by Research Affiliates), which is titled “Get Smart About Picking Dividend-Rich Stocks.” The article highlights that high-quality high-dividend-paying stocks...
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