The rating agency Morningstar has spruced up its rating system, which “hasn’t proved to be very predictive for future performance and volatility” and has “lost its luster because of the…
Here’s How Active Managers Squander Alpha
New research shows that active managers do in fact generate alpha, but have a hard time keeping it because they hold positions too long. This according to an article in…
The Danger of Overscrutinizing Out of Favor Investment Metrics
By Jack Forehand (@practicalquant) — No investing factor has been maligned more than the Price/Book in recent years. In a period where value in general has performed very poorly, the Price/Book…
Another Hedge Fund Giant is Returning Investor Capital
Louis Bacon is stepping away from Moore Capital Management, which will return money to investors from three of its flagship funds “while continuing to invest on behalf of the firm’s…
The Misery of Value Investing
A recent article in Institutional Investor discusses the challenges faced by value investors and the reasons behind them. “There’s no single reason for this unprecedently bad run for value investing,”…
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…
Listening to “Armageddonist” Predictions Can Prove Costly
A recent MarketWatch article shares the findings of one industry executive who had reportedly had enough of end-of-days-like market predictions and did some calculations of his own. Michael Cembalest, chairman…
Dimensional Changes investment Process
After years of research, quant investing pioneer Dimensional Fund Advisors added a new source of return to its investment process, according to a recent article in Institutional Investor. “Dimensional is…
Ten Companies with the Most Cash
“American companies are sitting on piles of cash, frustrating investors and leading some on Wall Street to wonder why they aren’t spending,” according to a recent CNBC article. Microsoft tops…
“Golden Cross” Price Pattern Forming Small Caps
A MarketWatch article from earlier this month discussed the possibility of a “golden cross” price pattern to emerge in the Russell 2000 index, the benchmark of small cap stocks, which…