If I asked you to name the greatest investor of all time, you would likely immediately think of Warren Buffett. And there is good reason for that. Buffett has put up 20% annual returns since 1965, which is about double what the market returned over the same period. If you didn’t name Buffett, you might think of Peter Lynch, which would be another good choice. Lynch steered the Magellan Fund to a 29% return from… Read More
By Jack Forehand, CFA (@practicalquant) There are many skills that can benefit you as an investor. Being smart is certainly an asset, although it can also get you in trouble if you don’t know your limitations. The ability to control your emotions is also a huge plus. But I think the most important skill may be the ability to think critically. Having a process you use to view the investing world through and following that… Read More
By Jack Forehand, CFA (@practicalquant) Factor timing is a pretty controversial topic in the quantitative investing world. On one hand, we are all taught that we should buy low and sell high, so it seems intuitive to add exposure to factors that are out of favor. But in reality, it isn’t that simple and factor timing is much more difficult than it would seem in theory. This issue has also divided some of the smartest… Read More
By Jack Forehand, CFA (@practicalquant) Investing in the stock market is a risky activity. The obvious risks like losing a large portion of your portfolio during a bear market, or underperforming the market by a wide margin if you employ an active strategy can be more than many investors can handle. Given th high level of risk that is inherent in investing, it doesn’t make sense to take more risk than you have to. But… Read More
By Jack Forehand, CFA (@practicalquant) Recency bias can be a major issue for many investors. When we analyze the probability of any event in the market occurring, we tend to rely more on the recent past than we should. That can mean that we give too much credence to the most recent year or most recent few years. But it can even go further back than that. For example, when we think about what a… Read More
By Jack Forehand, CFA (@practicalquant) Anyone who reads my articles regularly knows that I am a big user of Twitter. Some of the best investors in the world regularly post to the platform and it is hard for me to describe the amount I have learned from using it. My favorite people to follow on Twitter are those who make me think about things in different ways than I currently do. One person who certainly… Read More
This is Part II of my interview with Tobias Carlisle of the Acquirer’s funds, which just released its first ETF, the Acquirer’s ETF (ZIG) earlier this year. In Part I, we talked about some of the arguments against value investing and how they can be refuted. You can read that here. In Part II, we talk more about the intricacies of building a value portfolio. As a reminder, this interview was taken from a phone… Read More
As those who read my articles know, I am a big believer in value investing. But I also understand that as a follower of value, I am prone to focusing on information that supports that belief. A while back, I tried to combat my own confirmation bias by writing an article that looked at the arguments against value investing. That article ended up being the most read article of all time on our blog. So… Read More
By Jack Forehand, CFA (@practicalquant) This is Part II of my interview with Jim O’Shaughnessy. If you missed Part I, you can find it here. In part II, we talk about trend following, the future for simple value investing, and we take in in depth look at some of the arguments others have made in favor of the death of value investing. Just a note before we begin. This interview was transcribed from a phone… Read More
By Jack Forehand (@practicalquant) Factor investing has grown dramatically in recent years. But it is far from new. As those of us who invest using factors seek to learn more about them and the best way to utilize them in our portfolios, there is no better place to turn than those who have been there since the beginning. For this week’s interview, I have the privilege of talking to Jim O’Shaughnessy. Jim was a factor… Read More