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Value Investing Strategy (Strategy Overview)

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Allocations for August 2022 (Final)
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Investing Research Articles

3185 Research Articles

Hedge Funds Strongest Around the Turns of Odd Years?

…hedge funds in aggregate perform best around the turn of the year and during odd-numbered years. This seasonality is little different from that of the overall stock market.

Dynamics of Size and Value Investing

…as a corollary to mean reversion of firm profitability, asymmetries in small-big and value-growth stock migrations drive the size effect and the value premium.

Synthetic Hedge Funds?

…relatively simple clones based on exchange-traded instruments perform well enough to be considered as liquid, transparent, scalable and low-cost alternatives to hedge funds for many fund styles.

Which Financial Performance Measure Best Fits Stock Valuation?

…operating earnings forecasts are the best simple indicator of stock market valuation.

Risky Stocks + Short Sellers = Low Returns

…high short interest alone does not predict abnormally low future returns. Rather, high short interest for stocks that are particularly risky to trade (high idiosyncratic volatility) predicts low future returns.

Momentum Strategies Sputtering?

…there are a lot of twists and turns to momentum strategy returns. Momentum players should pay attention to the subtleties.

A Republican Risk Premium?

…a pro-Democrat/anti-Republican bias in the mainstream media may affect the economic risk perception of some investors/potential investors, thereby affecting stock valuations.

Financial News Sentiment Predicts Stock Returns?

…media sentiment predicts small surprises in earnings and stock prices, which investors quickly incorporate into stock prices. However, transaction costs offset the surprise returns.

Jim Cramer’s Mad, Mad, Mad, Mad Market?

…the losers are the Mad Money viewers who buy recommended stocks at the open the next day. The winners are the market makers and arbitrageurs who sell the overpriced recommendations on day 1, and the traders who sell them on days 2 through 12.

Classic Paper: Company Valuation Methods

…the value of a company’s equity depends on its future cash flows (derived from the company’s growth rate and return on investment) and on the required return on equity.