…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…
Search Results for: value
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,…
What Makes a Great Investor? Count to Ten.
…and probabilities is essential.” Understand value. While many things have changed over the years, one concept that hasn’t changed is that “the present value of future free cash flow determines…
Are Index Funds Passive Aggressive?
…to market distortions where funds will “move into or out of shares because of their status in key indexes, instead of anything to do with the securities’ underlying value.” …
Debating with the Oracle of Omaha
…stocks, says Merriman, are the better option for investors who want to take advantage of “boring” value stocks. Look for top-brand companies that control prices. Buffett sings the praises of…
Forget Asset Allocation, says Glenmede’s CEO
…weighting based on market value “without regard to valuation.” He says this results in overvaluation of “fashionable” stocks and can create market inefficiencies. In particular, he refers to the tech…
The Forecaster and the Dart-Throwing Chimp
…“you’re probably not going to do a very good job predicting what the value of Google is going to be next week on the New York Stock Exchange.” Tetlock argues…
In Factor Investing, Integration is a Plus
…factors (eg. building one portfolio for value and a second for momentum and then combining the two), better results can be obtained through an “integrated” approach whereby investors would build…
Can Active Investing Still Generate Alpha?
…that instead of “beating the market” per se, systematic investing on the basis of factors such as value, size, and profitability can lead to greater overall returns. Specifically, they show…