Excess Returns, Ep. 31: Can You Quantify Warren Buffett?

In this episode, we are going to try something a little different. Our goal at Validea is to capture quantitative strategies that work over the long-term. To do that, we go through books and academic papers to find factor-based models with results to back them up. We are going to periodically do some episodes for the podcast where we do a deep dive into these strategies and look at the factors behind them. In the… Read More

Excess Returns, Ep. 30: The Pros and Cons of Quantitative and Discretionary Investing

We all have a tendency to believe that the way we invest is the best way. As quantitative investors, we can sometimes feel that there is no reason anyone should ever use a discretionary strategy. But like most issues in investing, there are two sides to this argument. In this episode, we talk about the benefits of both quantitative and discretionary investing. We discuss: Why quantitative strategies can limit the impact of emotion and biases… Read More

Excess Returns, Ep. 28: The Danger of Focusing on What Should Be and Missing What Is

We all have our beliefs about the way that things should work in investing. When the market gets overvalued, we think it should go down. When value stocks struggle for a long period of time, we think they should outperform. When central banks or governments implement policies we don’t agree with, we think they will inevitably end in disaster. But that focus on the way we think things should be can sometimes lead us to… Read More

Excess Returns, Ep. 27: Quality and Low Volatility: The Factors That Shouldn’t Work

Investing factors that work over time typically do so for one of two reasons: they either produce an excess return by taking on additional risk or they benefit from the tendency of investors to systematically misprice certain types of securities. Factors like value and momentum are easy to explain using this framework, but the outperformance of quality and low volatility offers more of a challenge. In this episode, we take an in depth look at… Read More

Excess Returns, Ep. 25: An In Depth Look at Momentum Investing

Momentum investing is difficult to understand for many investors. While a concept like value that involves trying to buy stocks at a discount to what they are worth resonates with many, the idea of betting that stocks that have already gone up will go up more can be much more difficult to understand. In this episode, we take an in depth look at momentum investing. We discuss: The different types of momentum and ways to… Read More

Excess Returns, Ep. 24: The Pros and Cons of Factor Timing

We are all trained to buy low and sell high, and it is tempting to conclude that we can do the same thing with factors. But the research suggests that factor timing strategies are extremely difficult to implement in practice. In this episode, we discuss the pros and cons of factor timing and look at some of the approaches that investors can use to time factors. We discuss: Why most investors should avoid attempting to… Read More

Daniel Crosby The Behavioral Investor Investor Psychology

Excess Returns, Ep. 21: Interview: Psychology and COVID-19 with Dr. Daniel Crosby

In this week’s episode we shift gears a little from our usual investing focus. We wanted to spend some time talking about the current COVID-19 crisis and its impact on all of us as people. To do that, we brought in an expert of human psychology and behavioral finance, Dr. Daniel Crosby. Daniel is the author of the Behavioral Investor and the Chief Behavioral Officer at Brinker Capital. In the interview, we discuss: What we… Read More

Excess Returns, Ep. 20: The Limits to Lessons from Past Bear Markets

Whenever we are confronted with a bear market, we all want to figure out how it will play out. We want to know how big the decline will be. We want to know when it will end. We want to know what stocks we should buy to limit losses during it and to outperform the market after it. To answer these questions, our minds tend to point us to the simplest solution we can find.… Read More

Tobias Carlisle Search Results Web results The Acquirer's Multiple Value Stocks

Excess Returns, Ep. 18: Interview: Value Investing with Tobias Carlisle

In this week’s Excess Returns, we are trying something new. In addition to our regular episodes, we have decided to periodically talk to some of the people we respect most in the investment community to get their insights on the issues facing investors today.  For our first conversation, we talk to our friend Tobias Carlisle about value investing. Toby is probably the smartest value investor we know. He is the author of four books on… Read More

Excess Returns, Ep. 15: Some Thoughts on Market Panics

The argument that investors should stay the course during market declines is an easy one to make. It also in most cases is the correct one, since figuring out when to get out of the market, and when to get back in, is very difficult for most investors to do. Despite the strength of the stay the course argument, those of us who make it can sometimes fail to deliver it with the proper recognition… Read More