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
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
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
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
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
By Justin Carbonneau (@jjcarbonneau) – Two weeks ago I wrote an article, Differences in Value, where I outlined the various criteria (i.e. price-to-sales, price-to-book, and enterprise value-to-EBIT) used in the value models on Validea. As the piece got passed around Twitter, there was a very good comment by Tren Griffin, an investor and thoughtful writer. Griffin tweeted the following (see below – included in the tweet was a screenshot of a page from Berkshire’s Hathaway’s… Read More
By Jack Forehand, CFA (@practicalquant) — Value stocks have struggled for a long time now. Although the degree of underperformance can vary significantly based on the metric you use and the universe you apply it to, there is no question that the past decade has been a bad one for value investing. And the past five years have been even worse. I have always been a big believer in value, but it is only natural… Read More
By Justin J. Carbonneau (@jjcarbonneau) — A few weeks ago my partner, Jack Forehand (@practicalquant) wrote a piece titled “The Mechanics of Value Investing“. In it, he highlighted the various ways in which value investing can be defined. This topic was recently brought to light again in a recent tweet (see below) by Tom Psarofagis, ETF Analyst at Bloomberg. As Mr. Psarofagis points out, the underlying holdings in “value” ETFS can often be very different.… Read More
According to an article in Yahoo Finance, Berkshire’s recent investment in Amazon “flies in the face of his long-held investing views” and signals “it’s okay to buy high price-to-earnings multiple companies provided they will change the game at some point in the future.” The article notes that Amazon’s stock, which is trading at a “lofty” price-earnings multiple of 51 (data from Yahoo Finance), is “known for not having steady profits as it invests aggressively to… Read More
Last week Validea Partner Justin Carbonneau was interviewed by Tobias Carlisle on the Acquirer’s Multiple Podcast. Toby and Justin discuss Validea and our approach to investing, as well as a bunch of other investing related topics. Below is an outline of the discussion and a link to the video. How Validea capture’s quantitative models and what we do with them; How we actually implement these strategies in the real world; The underperformance of value stocks,… Read More