Excess Returns, Episode 1: The Mechanics of Value Investing

We are happy to announce the release of our new podcast Excess Returns. On each episode,  Validea partners Justin Carbonneau and Jack Forehand will talk about a wide range of investing topics with the goal of helping those who watch and listen become better long term investors, all in twenty minutes or less per episode. In our first episode, we talk about the mechanics of value investing and the many decisions that go into constructing… Read More

Is This Value’s Moment to Shine?

There’s a “growing chorus on Wall Street for investors to look beyond the FANG momentum plays and more toward value stocks. In other words, investors are pulling a Warren Buffett.” This according to a recent article in CNN. The article cites sectors including banking, energy and health care as showing promise after “lagging growth stocks for the past half-decade” –adding that the S&P 500 Value Index is up approximately 40% over the last five years… Read More

Joel Greenblatt Defends Value Investing

In a recent interview with The Wall Street Journal, Joel Greenblatt—described as “maybe the best-known value investor this side of Warren Buffett,” shared insights on the subject of value investing and the strategy’s near decade-long struggle with underperformance. Here are some highlights: ·      On his definition of value investing, Greenblatt clarifies, “It does not mean low price-to-book-value, low price-to-sales ratio investing, which is how most people define it.” If you think about stocks as shares of… Read More

Why Use One Value Factor When You Can Use Many

By Justin Carbonneau (@jjcarbonneau)—-Interested in chatting with Justin – let him know.—- Suppose you wanted to find the value stocks in today’s market using common value ratios. Which would you use and why? Would you lean more heavily on the price-to-book ratio, which is largely used in academic testing and originates out of the world of Graham & Dodd? Or would you rather use something like the price-to-earnings ratio, which is more common and uses… Read More

The Culture of Value Investing

In a June interview with WealthTrack, host Consuelo Mack talked to the senior portfolio managers of Tweedy, Browne Company—a firm which in the past held brokerage accounts for both Benjamin Graham and Warren Buffett and has been described by Berkshire’s Charlie Munger as “spiritual descendants of Ben Graham.” In the interview, Mack spoke to William Brown and John Spears about their traditional value approach to investing and how it has evolved over the years. Here… Read More

Tobias Carlisle: Insights on Deep Value Investing

In a recent interview with Bloomberg TV, deep value investor Tobias Carlisle explained his macro approach as well as the strategy behind his firm’s ETF. Carlisle, founder and portfolio manager at Acquirers Funds, explained that he seeks “strong businesses that are throwing off cash and buying back stock, very traditional long side for value.” His preferred metric in evaluating companies, he explained, is one that he created himself and calls the “acquirer’s multiple” which is… Read More

Value Investing: Is It Dead?

Investors can no-longer rely on the “so-called value premium to continue in the future,” according to a recentMarketWatch article by Paul Merriman, author and founder of Merriman Wealth Management. While Merriman believes that value investing is still a good option for investors, he writes, “there’s very little that I can guarantee about future investment returns, and none of it is useful if you’re trying to gain an edge on your fellow investors.” He reiterates that… Read More

Goldman: Value Investing Still Alive, with This Twist

A recent CNBC article reports that, according to Goldman Sachs, there’s still life left in a value investing strategy, especially with the Fed set to cut rates again.  Goldman says that value stocks are poised for a comeback, adding that the valuation gap between expensive and cheap stocks is the widest it’s been in nine years. The article offers insights from the firm’s chief U.S. equity strategist David Kostin, who said in a recent note,… Read More

Five More Questions: Value Investing with Tobias Carlisle

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

Five Questions: Defending Value Investing with Tobias Carlisle

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