Franchise Quality Score: A Method for Evaluating Intangibles

The lofty prices of certain stocks (i.e. FAANG) present a challenge for value investors, according to an August article in CFA Institute that delves into the subject of intangible assets and presents a proprietary metric—called the Franchise Quality Score—intended to evaluate the benefits such intangibles can offer. The article explains that current accounting standards were created during the industrial era when businesses were primarily engaged in manufacturing. “These standards have not kept pace in an… Read More

Top Investment Shop Focuses on Quality First, Value Second

Barron’s profiles Phil Davidson of American Century Investments, a value investor who “focuses on quality first, value second.” He joined the firm in 1993 to begin a value-based approach to investing within a growth-oriented firm. “We sat on a different floor than the growth investors”, Davidson said, noting that he and Peter Zuger began with $1 million in seed capital. Now, the value team of 25 investors has $34 billion in assets spread across nine… Read More

Contrasting Buffett’s New & Old Value Investing Styles — Cigar Butt vs. High Quality.

Warren Buffet’s strategy has changed over the years because the funds he manages have grown, according to Professor George Athanassakos article in Canada’s Globe & Mail. Both the old and new Buffett approaches are types of value investing but they differ in key ways.  The early-career Buffet followed the advice of his professor and the father of value investing, Ben Graham.  He picked stocks with low P/E (or P/B) ratios that, upon closer evaluation, were… Read More

Contrasting Buffett’s New & Old Value Investing Styles — Cigar Butt vs. High Quality.

Warren Buffet’s strategy has changed over the years because the funds he manages have grown, according to Professor George Athanassakos article in Canada’s Globe & Mail. Both the old and new Buffett approaches are types of value investing but they differ in key ways.  The early-career Buffet followed the advice of his professor and the father of value investing, Ben Graham.  He picked stocks with low P/E (or P/B) ratios that, upon closer evaluation, were… Read More