Austria’s 100-Year Bond at Less Than 1%

Austria’s recent return to the century-bond club with a 2 billion-euro ($2.3 billion) debt issue is a clear example of how the European Central Bank is encouraging greater risk taking, according to a recent article in Bloomberg. “That’s what it was designed to do, for issuers and investors alike,” the article notes, adding that the successful sale (which was more than 10 times oversubscribed) may “just be the start of a wave of European sovereign… Read More

Void Left by Dearth of Buybacks Filled by Robinhood Traders

The decline in stock repurchases by U.S. companies is being partially offset by demand from retail investors, according to a recent article in Bloomberg. According to client note from Goldman Sachs Group strategists, “Broker data show a surge in retail equity trading activity,” and “Foreign investors and households will supplant corporations as the largest 2020 source of U.S. equity demand.” The trend stands in stark contrast to the previous four years, when companies reportedly spent… Read More

Quants Find the Missing Piece

New research has found that the implementation methods related to some factor-based investing strategies is the culprit for underperformance, and that “a simple formula can solve it.” This according to an article in Institutional Investor. The study reportedly analyzed the best way to combine investment factors like value and momentum and found that a portfolio constructed using “forecast risk management”—a formula that “determines the weights of an optimal multi-factor portfolio with risk management”—could generate “significant… Read More

World’s Worst Market Timer: A Story and A Lesson

By Justin Carbonneau Imagine this: 80 years ago, you won a prize that promised 13 payments of $10,000 to be paid out over time. You think you’ve finally got lucky, hit the big one. That is, until you read the fine print: Terms & Conditions You must invest the money in the U.S. market, as represented by the S&P 500. You can’t touch the money once invested. You can’t look at the investments’ performance until… Read More

Stock Market Legend Grantham Calls Crisis the “Real McCoy”

In a recent interview with CNBC, investing legend and GMO co-founder Jeremy Grantham “painted a very dire picture of the investment landscape in the U.S.” according to an article in MarketWatch. Grantham, who has accurately predicted three financial bubbles, said: “My confidence is rising quite rapidly that this is, in fact, becoming the fourth, real McCoy, bubble of my investment career. The great bubbles can go on a long time and inflict a lot of… Read More

Peril and Opportunity in Small Value Stocks

The fortune of small value stocks are “irrevocably linked” with today’s key economic questions, according to a recent Morningstar article. The article argues that this segment of the market is vulnerable: “Even at peak conditions, most small value firms are relatively unprofitable. Nor are they financially robust, recording an average grade of C+ on Morningstar’s Financial Health measure (the market norm being B+).” It adds that these issues might be more manageable but that small… Read More

Bored Sports Bettors Try Their Hand at Stocks

When the coronavirus pandemic hit, sports bettors without action turned to the stock market to scratch the itch, and some say it has moved the market. This according to a recent article in The New York Times. “Millions of small-time investors have opened trading accounts in recent months,” the article reports, “a flood of new buyers unlike anything the market had seen in years, just as lockdown orders halted entire sectors of the economy and… Read More

Painful Decision for Investors Approaching Retirement

The coronavirus pandemic, which has “created a crisis that some economists believe could take the country nearly a decade to recover from,” is leading some individuals nearing retirement to evaluate whether or not to stay in the market. This according to a recent article in The Wall Street Journal. According to data from Fidelity Investments, the article reports, “millions of individuals have decided to do the latter,” with nearly a third of investors ages 65… Read More

Jim O'Shaughnessy Stocks Investing OSAM Asset Management

Excess Returns, Ep. 29: Timeless Investing and Life Lessons with Jim O’Shaughnessy

In this week’s episode we are privileged to be joined by Jim O’Shaughnessy. Jim is a pioneer in quantitative investing and the founder of O’Shaughnessy Asset Management. He is also the author of the best selling book What Works on Wall Street, which is now on its 4th edition and is considered by many to be the definitive guide to factor-based investing. In this discussion, we get Jim’s takes on a wide range of topics… Read More

The Widening Growth/Value Gap

In a recent Financial Times Money Show podcast, editor Claer Barrett discusses the recent market rally, government stimulus, and the relationship between value and growth stock valuations with FT columnist Merryn Somerset Webb. Here are key takeaways from Ms. Somerset Webb’s comments: Investors should view the rally with caution: Those that had concerns about the market and valuation levels before the pandemic hit should be “particularly concerned about the areas that are very expensive,” with… Read More