Five More Questions: Factor Investing with Jim O’Shaughnessy

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

Five Questions: Factor Investing with Jim O’Shaughnessy

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

Jim O’Shaughnessy on the Psychology of Investing

In a September interview on the Off the Chain podcast, legendary investor James O’Shaughnessy shared insights on human nature, psychology, and how they manifest in investing decisions. Here are some highlights: On cryptocurrency, O’Shaughnessy explained that he doesn’t know enough to be a “bull or bear.” O’Shaughnessy believes that crytocurrency, which is based on a deflationary monetary model, has some appealing aspects and might represent a store of value if it saw less volatility. But… Read More

The O’Shaughnessy Approach: Guarding Against Narrative-Loving Humans

An article in CityWire profiles the father-and-son investing duo of Jim and Patrick O’Shaughnessy, chief investment officer and chief executive respectively at quantitative money management firm O’Shaughnessy Asset Management. Jim O’Shaughnessy, who began his career in quantitative investing in 1987 and has authored four best-selling books on finance, explains, “We want to find as much empirical evidence that supports certain ways of selecting securities and – equally importantly – of ignoring securities that would fail… Read More

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