Every Investor Should Read These O’Shaughnessy Tweets

In a recent Bloomberg article, columnist Barry Ritholtz references a provocative tweetstorm by famed investor James O’Shaughnessy regarding “investor ignorance.” “The post, as regular readers know,” writes Ritholtz, “was about one of my favorite subjects. To be more precise, it was about our own lack of understand of our own lack of understanding.” O’Shaughnessy’s message centers on how important it is for investors to understand what they don’t know, starting with how the market will… Read More

What Gambling and the Oakland A’s Can Teach You about the Importance of Process

By Jack Forehand (@practicalquant) —  I have a friend who is an infrequent gambler and won money almost every time he went to the casino. He did it by exclusively playing the slot machines. His approach involved sizing up the room and using his gut feeling to determine which machine to play. He used a similar approach to determine how much to bet. When that gut feeling approach said one machine was no longer likely to… Read More

Just Another Stormy Monday? Lessons from Market Disruptions

By John Reese (@guruinvestor) — Thirty years ago, five days after 1987’s infamous Black Monday, Louis Rukeyser shared some calming and timeless words on his evening broadcast of Wall Street Week: “Okay, let’s start with what’s really important tonight. It’s just your money, not your life.” He goes on to list a number of life’s reassuring certainties (including warm puppies and singing robins) that would endure unfazed in the wake of the stock market’s 23… Read More

Podcasts of the Week: Urban, Wilmott & O’Shaughnessy

By Jack Forehand — With so many great investing podcasts out there, it can be difficult to identify the best ones. Through our new Podcasts of the Week segment, I will try to help filter out the most interesting episodes and identify the podcasts I learned the most from each week. In addition, we will also take a look at a great podcast from the past via the From the Archives section. Best Episodes This… Read More

Stock Picks for the Level-Headed Investor

When buying stocks, it is essential for investors to value process over outcome, says guru James O’Shaughnessy during a recent speaking engagement. This according to a recent Nasdaq article by Validea CEO John Reese. O’Shaughnessy shares a cautionary tale of a client who would knee-jerk when the market rose or dipped, often buying or selling based on emotion rather than on fundamentals. He stresses, writes Reese, how this practice will “get you into trouble, since… Read More

James O’Shaughnessy: Knee-Jerk Investing Doesn’t Work

A quantitative investing guru who uses concrete metrics to analyze stocks, James O’Shaughnessy believes that investors get in the way of their own success by reacting emotionally, writes Validea CEO John Reese in this week’s Forbes. The article outlines O’Shaughnessy’s investment philosophy that, to outperform the market, an investor must choose a strategy and “stick to it, no matter what” as well as his belief that most investors lack the mindset that allows them to… Read More

Fundamentally Sound Stocks Win When Recessions Loom

Whether it’s interest rate hikes or China’s slump or US weakness, investors have found a myriad of economic reasons to worry in 2016 — and they’ve expressed their worries by pulling billions of dollars out of stocks. But in his latest for Canada’s Globe and Mail, Validea CEO John P. Reese highlights some new research showing that the best time to beat the market is when economic times are tough. “The research comes from O’Shaughnessy… Read More

The Payoff and Perils of Momentum-based Stocks

Many investors follow momentum-based methods or approaches when investing in equities, but does momentum investing actually work and what are the results? This is the basis for a recent AAII article by Charles Rotblut, CFA, vice president at AAII and editor of the AAII Journal. Relative price strength, which compares the price performance of a security to another security or the overall market or an industry, is one of the most popular ways to identify… Read More

Good Strategies Look Beyond Earnings

Whether it’s talk about earnings growth or earnings estimates or price/earnings ratios, stock market news is usually filled with discussions of corporate earnings. But in his latest for Seeking Alpha, Validea CEO John P. Reese says that good investing goes beyond looking at earnings-related metrics. “Earnings don’t always tell the whole story,” Reese writes.  “In fact, oftentimes other metrics can provide an even better gauge of how a company or the market is doing. The… Read More

Mid Cap Manager’s Rules-Based Method Produces Strong Results

Barron’s reports on mid-cap fund managers Neil Hennessy and Brian Peery, who manage Hennessy Cornerstone Mid-Cap 30. Peery says, “A lot of financial advisors don’t allocate in the mid-cap space, which gives us an advantage.” Mid Caps have outperformed Large and Small Caps over 10, 15, and 20 years, and the Cornerstone Mid-Cap fund has beaten 86% of its peers. Hennessy and Peery take what Barron’s describes as “a fairly strict, rules-based approach to constructing… Read More