Articoli con tag : validea

Value Factor Valuations Over Time: Us and Developed

A cura di Wesley Gray, Validea Capital Management We built a simple tool recently to review so-called value spreads over time. This tool maps out the median valuations for the top decile and bottom decile “cheap stock” portfolios (as measured by EBIT/TEV). Why might this be useful? This tool al ...

Volatility Targeting Improves Risk-Adjusted Returns

A cura di Larry Swedroe, Validea Capital Management There’s a large body of research, including the 2017 study “Tail Risk Mitigation with Managed Volatility Strategies” by Anna Dreyer and Stefan Hubrich, that demonstrates that, while past returns do not predict future returns, past volatility ...

Differences in Value

A cura di Justin Carbonneau, Validea Capital Management A few weeks ago my partner, Jack Forehand (@practicalquant) wrote a piece titled “The Mechanics of Value Investing“. In it, he highlighted the various ways in which value investing can be defined. This topic was recently brought to light ag ...

What Would Benjamin Graham Make of Today’s Market?

A cura di Validea Capital Management Although value stocks have lagged for a long time, an article by Wall Street Journal columnist Jason Zweig argues that the strategy’s champion, Benjamin Graham, still had the right idea. Zweig notes, “faster-growing, higher-priced stocks have outperformed by ...

An Academic Look at Factors

Di Jack Forehand, Validea Capital Management One of the major challenges that the finance community has faced over the years is how to explain what drives stock returns over time. If the market is efficient, then the only way to generate excess returns is to take more risk. But risk only makes sense ...

The Mechanics of Value Investing

A cura di Jack Forehand, Validea Capital Management We all have a tendency to want to put investing strategies into groups. That can sometimes be misleading, though. There are more investment products than I can count that use the word value in their name. But beneath the surface, many of those prod ...

New Metric for Financial Performance: Return on Integrity

A cura di Validea Capital Management A recent CFA Institute article discusses what integrity means in the financial industry and the role it plays in performance results. The article quotes Rob Lake, founder of London-based consulting firm Authentic Investor, who argues that integrity should be a ce ...

Twin Momentum: A Combination of Fundamental and Price Momentum

A cura di Justin Carbonneau, Validea Capital Management An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an unbalanced force. -Isaac Newton Momentum investing, or buying stocks exhibiting strong price performan ...

Where has all the Alpha gone?

A cura di Jack Forehand, Validea Capital Management Alpha has always been elusive in the stock market. Stock pickers have tried to produce it since the market has existed, but in aggregate they have been largely unsuccessful.  Almost any long-term study that has been done has shown that managers wh ...

Factor Investing Fact Check: Are Value and Momentum Dead?

A cura di Wesley Gray, Validea Capital Management The “stock market,” at least as measured via the S&P 500, has been on an epic performance run — especially relative to almost all asset classes. It doesn’t matter whether you look at the other asset classes by geography (e.g., US, develop ...

The inexact science of market valuation

A cura di Jack Forehand, Validea Capital Management When it comes to market valuation, investors love certainty. They want to hear definitively that the market is cheap, or the market is expensive, and that they can use that information to predict where it is headed in the short-term. As a result, s ...

The Underappreciated Role of Luck in Investing

A cura di Justin Carbonneau, Validea Capital Management The $1.5 billion Mega Millions jackpot had a lot of people daydreaming about what they would do if they won such a windfall. With odds of about 1 in 250 million, you can almost guarantee with 100% certainty that you and everyone else you know t ...

The Challenges of Market Cycle Timing

A cura di Jack Forehand, Validea Capital Management Everyone wants to follow the investing advice of market legends. After all, that level of success is typically not achieved by accident. Investors want to learn from their wisdom. They want to do what they do. In some cases that can be a slippery s ...

The Pitfalls of Back Testing

A cura di Jack Forehand, Validea Capital Active investment managers have a pretty dismal long-term record. Depending on which study you look at somewhere between 80% and 90% of managers underperform their benchmarks over the long-term net of fees. But what if I told you there was a way to turn those ...

The Double Edged Sword of Avoiding Value Traps

A cura di Jack Forehand Value investing is full of pitfalls. It is easy to think that as a value investor all you need to do is buy cheap stocks and eventually the market will come around to your way of thinking, but that just isn’t the way things work in the real world. Many ...

I Think, I Know, I Have No Idea

A cura di Jack Forehand, Validea Capital Management There are some areas of life where you can never have all the answers – no matter how much you know, how smart you are, or how good the school was you got from your degree from. Investing is one of those areas. As humans, we want ...

Bear Market Would Deliver Death Punch to Active Funds

A cura di Validea Capital Management A recent Bloomberg article warns that, while active fund managers are tempted by the thought that a market downturn would allow them to showcase their talents to investors—that a “human hand” is better than the ‘dumb’ passive funds that investors have f ...

“I Don’t Know”: The Most Important Phrase in Investing

A cura di Jack Forehand, Validea Capital Management Certainty is often seen as a sign of strength in life. When someone is telling us the best course of action within their field of expertise, we want them to do so with a level of conviction that implies no other outcome is possible than the one ...

Are Value Stocks Poised for Growth?

A cura di Validea Capital Management Value investing has fallen on tough times, and is “getting tiresome even for those famous for their patience,” according to a recent Barron’s article. On the face of it, value investing should work, the article argues. “At its most basic, it’s buying st ...

Momentum Everywhere, Including in Factors

A cura di Larry Swedroe, Validea Capital Management Momentum is the tendency for assets that have performed well (poorly) in the recent past to continue to perform well (poorly) in the future, at least for a short period of time. In 1997, Mark Carhart, in his study, “On Persistence in Mutual Fund ...

The Case for Value Stocks

A cura di Jack Forehand, Validea Capital Management Value stocks have lost their mojo. After an extended period from 2000 to 2007 where they outperformed growth stocks by a wide margin, they are now in one of their longest periods of underperformance ever. The below chart shows the iShares Core US G ...

The Realities of Mean Reversion

A cura di Jack Forehand, Validea Capital Management “Importantly, reversion to the mean in the investment business extends well beyond the results for mutual funds. It applies to classifications within the market (small capitalization versus large capitalization, or value versus growth), across as ...

Focus on fundamentals rather than “expert” forecasts

A cura di John Reese, Validea Capital Management American philosopher and educator Nicholas Murray Butler once said, ” An expert is one who knows more and more about less and less until he knows absolutely everything about nothing.” His words, both wise and timeless, could apply to “expert” ...

Stock Market Lessons Learned in 2017

A cura di John Reese, Ceo di Validea Capital Management Over the past twelve months, we’ve seen the bull market continue to trudge ahead with highs in many U.S. indexes and growth in various sectors and industries. With the news of major tax reform comes optimism for continued corporate earnings s ...

A proposito di “investing factors”

A cura di Jack Forehand, CFA (tratto da Validea) Factor investing is a long-term pursuit. Successfully following a factor-based approach is a function of studying what works over time, implementing it in a disciplined way, and then staying the course through what will inevitably be long periods of u ...

Un’analisi del multiplo P/e

A cura di Justin Carbonneau, Validea Capital Management In our book, “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies”, we called Benjamin Graham the “Granddaddy of the Gurus” given his track record and influence on other value investors, including Warr ...

In the Hunt for Black Swans, Disciplined Investing Strategies are Best

A cura di John Reese, Validea Capital Management Imagine a scenario in which you’re unsure about directions, so you ask a friend if you could follow him in your car. He happily agrees, then tells you to turn right a mile before he does. In some ways, talk about strategies to protect investors from ...

Tactical asset allocation: does the day of the month matter?

A cura di Wes Gray e Jack Vogel, Alpha Architect Most long-term approaches to investing, like tactical asset allocation or factor investing, are designed to trade infrequently, generally once a month or once a quarter. This is a feature, not a limitation. Trading infrequently forces a strategy to ig ...

Factor Investing: evidence based insights

A cura di Wes Gray, AlphaArchitect I will be talking on the Factor Investing panel at the upcoming Evidence-Based Investing Conference in Dana Point, CA next Sunday –Tuesday. I am excited for the opportunity to chat, and figured I would highlight a few thoughts we have on the topic going into the ...