…ratio of 25.2 is higher than 89% of past market peaks. While Hulbert believes that “valuation indicators are not helpful guides to the market’s shorter-term direction” he argues, “value eventually…
Search Results for: value
Active vs. Passive Results Linked to Market Cycles
…when value investing is favored. “When very high-priced stocks are running, passive investing wins because active managers tend to shun the higher valuations.” He warns that while passive investing has…
Fundamentally Solid Value Picks in the Spirit of Graham and Doddsville
In his revered 1984 speech at Columbia Business School, Warren Buffett referred to the strong track records of a group of prominent value investors as follows: “A concentration of…
Blending Strategies to Reduce Volatility and Boost Results
…Momentum Investor portfolio has returned 192.2% and our Value Investor portfolio has returned 238.3% (outperforming the market during that time by 78.2% and 199.9%, respectively). Using these two strategies, the…
"Quantimental" Fund Management Raises Eyebrows
…factors such as value, momentum and volatility) into the management of funds that have been primarily fundamentally driven (focused on more traditional metrics related to earnings, profitability, debt levels and…
GMO: Don't Bail on Hedge Funds
…sustainable because they “represent an increase in the present value of an asset without any increase to the cash flows to the asset class.” So while the present values have…
Morningstar's Ben Johnson on Multifactor ETFs
…beta or value stocks. His review of the historical performance of different factor ETFs shows that, over a nearly 30-year period, many outperformed market-cap weighted global indices. He pointed out,…
Is Smart-Beta Investing Smart?
…If choosing only one smart-beta style, Brightman advises a “fundamental index based on value” which “tends to favor cheaper companies and systematically rebalances into those cheaper companies.” The biggest mistake…
The Trading Effect
In psychology and behavioral economics, the endowment effect is the hypothesis that people assign more value to things they own. Past studies have shown that experienced securities traders are less…
Think Twice Before Using the Forward P/E Ratio
…studies on value factors are actually conducted using trailing price-book and price-earnings ratios. “Recognizing the difference,” he says, “is critical to becoming a successful value investor.” To support his argument,…