Don’t Get Spooked By Value Stocks

Value stocks may have underperformed growth stocks for several years now, but Validea CEO John Reese says investors would be wise not to pronounce value investing dead anytime soon. “Given that it’s Halloween season, it seems appropriate that value stocks are starting to stage a comeback in the United States,” Reese writes in his latest column for Canada’s Globe and Mail. “Much like the villain in a scary slasher flick, value stocks have been beaten,… Read More

Here, There, and Everywhere — Value Wins

Think value is overrated? Think again. In a recently released Swiss Finance Institute Research Paper, Nilufer Caliskan and Thorsten Hens of the University of Zurich looked at value and growth stock returns across 41 different countries, and found that in every one, value outperformed over the long term. “In this study, we provide strong empirical evidence that the value premium exists world wide and differences across countries can be explained by differences in risk aversion… Read More

Study: Biases — Not Risk — Are Behind Value’s Outperformance

A new study shows that value investors who remain patient and rational tend to make out better in the market than those who buy up flashier stocks. According to Canada’s Financial Post, the study — performed by The Brandes Institute — examined how stocks performed in the year after reporting earnings. The findings: Value stocks on average rose, whether they beat earnings expectations or not; “glamour” stocks — big names in flashy industries like technology… Read More

Reese: Growth & Value Not an Either/Or

In the latest edition of his Hot List newsletter, Validea CEO John Reese says that investors too often fall prey to the idea that growth and value are opposing concepts. In reality, he says the best stocks include aspects of both value and growth plays. “In the dozen or so years I’ve spent studying history’s most successful investment strategies, I’ve found that paying too much attention to such style-box distinctions can be harmful to your… Read More

The Two-Pronged O’Shaughnessy Attack

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the James O’Shaughnessy-inspired strategy, which has produced annualized returns of more than 6.7% since its inception more than six years ago, a period in which the S&P 500 has gained just 1.3% per year. Below is an excerpt from today’s newsletter along with several top-scoring stock ideas based on the O’Shaughnessy… Read More

Buckingham: Time for Value

Recently, we highlighted a study performed by Russell Investments that found value stocks typically begin to overtake growth stocks “almost immediately” when the economy bottoms. Today, John Buckingham of Al Frank Asset Management provides some additional evidence that good times may be in store for value investors, who were hit particularly hard in the recent downturn. In an interview with, Buckingham says that in the previous five instances (before the current one) in which… Read More

Arnott: Value Stocks Priced at or below Depression Levels

Researcher and money manager Rob Arnott has made a lot of headlines lately with his focus on the bond market, but in yesterday’s Financial Times he keyed in on another asset class — and it’s one that he says is extremely cheap right now: deep value stocks. “Most investors,” writes Arnott, “do not yet realise that today’s spread between growth and value, on most measures, is nearly as wide as it was at the peak… Read More