The Case For Value Stocks

By Jack Forehand, CFA One of the biggest lessons I have learned in my investing career is the importance of being able to argue the other side of something I strongly believe in. Confirmation bias is one of the biggest enemies of successful investing. It leads us to seek out information that agrees with our position. It causes us to follow people who tell us what we want to hear. It makes us avoid those… Read More

The Misuse of Market Valuation

By Jack Forehand, CFA There is perhaps no piece of information that is more misused in equity investing than the valuation of the market. Whether someone has an agenda to show that the market is expensive, or that it is cheap, it is usually very easy to find data or a chart to prove their point.  Even for those who don’t have an agenda, it can be very easy to fall into the trap of misusing… Read More

A Look at Some Alternative Ways to Manage Risk

By Jack Forehand, CFA The 60/40 portfolio gets a bad rap. It seems like there is a new article or study every week talking about its weaknesses or outlining why it no longer makes sense in the current market environment. But despite all of this, it has just kept rolling along and doing exactly what it is supposed to do. Even with bond yields at very low absolute levels coming into this crisis and many… Read More

A Look at the Impact of COVID-19 on Value Investing

By Jack Forehand, CFA On the surface, value investing is pretty simple. As a value investor, I want to buy stocks at a discount. I want to look at a company’s price relative to what I think it is worth, and I want to build a basket of stocks where I think that discount is greatest. In theory, the calculation of what a company is worth is a complicated process that involves projecting its cash… Read More

A Letter to My Future Investing Self

By Jack Forehand (@practicalquant) Last Summer, I published an article where I wrote some letters to my former investing self. Investing is a lifelong learning process and we all make many mistakes along the way. My goal with that article, as I discussed in a recent podcast with Dr. Daniel Crosby, was to look at some of the challenging periods I have experienced in my investing career and to examine some of the lessons I… Read More

The Limits to Lessons from Past Bear Markets

By Jack Forehand, CFA (@PracticalQuant) The current bear market seems just like 2000. We had massive outperformance from growth and technology names coming into it, with small-cap value companies being left behind. And we had well above average valuations going in as well, just like we did here. So that must be the perfect analogue to look at to figure out what happens from here. Actually, on second thought, I see a lot of similarities… Read More

Three Things I Feel Strongly About – And Why I Might Be Wrong

By Jack Forehand, CFA (@PracticalQuant) Confirmation bias is one of the most damaging biases in investing. All of us want to be right. We all want to think that opinions that disagree with ours don’t have sensible arguments to support them. So we gravitate toward people who agree with ours. Whether it be in our personal relationships, or our virtual ones through things like social media, we all unconsciously want to seek out validation that… Read More

Some Thoughts on Market Panics

By Jack Forehand (@practicalquant) When the market pulled back in early 2018, I had just started writing publicly. It was my first chance to write an article offering my take on what investors should do during market declines. And I wanted to take advantage of the opportunity, so I brought out all the plays from my stay the course playbook. I talked about how stocks are the best long-term investment there is, and I threw… Read More

Five Questions: The Future of Asset Management with Meb Faber

Asset Management has become a more challenging place to make a living in the past decade. On the strategy side, alpha has become much more difficult to generate, as skill within the industry and computing power have risen and factor-based strategies have become more widely available. On the business side, falling fees and increasing market share for the largest players have made it very difficult for smaller firms to compete. But despite that, some smaller… Read More

Five Questions: A Balanced Look at the Future of ETFs with Nate Geraci

The ETF landscape has been undergoing significant change in recent years. Although the lowest fee products and the largest providers continue to dominate, several new trends have the potential to shake things up in the coming years. Proponents of things like ESG think they will change the ETF space in major ways. And supporters of Direct Indexing think it has the potential to upend the ETF industry as a whole. But there have been many… Read More