Value Investing

  • 17 Oct
    This Strategy Has Beaten Growth Investing 94% Of The Time

    This Strategy Has Beaten Growth Investing 94% Of The Time

    • I’ll analyze market data since 1927, and look at growth versus value returns.
    • I firmly believe that value investing returns can be further increased by applying a bit of common sense.
    • The differences in risk and returns are staggering, but few will actually become value investors.



    Introduction

    It’s almost funny that Eugene Fama, the Nobel prize winner and face behind the efficient market craze, has evolved over time and acknowledged that value investing beats growth.

    The two market anomalies that show how markets aren’t efficient after all are size and value. The findings were published in the now famous 1993 Journal of Financial Economics article by Fama and French, Common Risk Factors In The Returns On Stocks and Bonds. Markets aren’t efficient and you can easily beat the market by following a value strategy and by buying small caps (stocks with a market capitalization below $2 billion). More →

  • 28 Sep
    This Is How You Find Stocks With A Margin Of Safety

    This Is How You Find Stocks With A Margin Of Safety

    • It’s impossible to accurately determine the actual value of a stock, but there are some methods that allow you to come close.
    • What’s even better is when you can buy at a price much lower than your intrinsic value calculation.
    • Qualitative factors can also help in assessing the margin of safety.

    Introduction

    The best investments are those that carry no risk with unlimited upside.

    Given that the markets are inefficient, it’s possible to find such investments and in today’s article, I’m going to describe the best ways to figure out what the margin of safety is in an investment. More →

  • 11 Aug
    Is Value Investing Dead?

    Is Value Investing Dead?

    • The last 10 years have been terrible for value investors as it has seemed like fundamentals don’t matter at all anymore.
    • There are limited options to be a value investor as the Russell 1000 value index has a price to book ratio above 2.
    • I’ll discuss three options for what a value investor can do and the historical results of such approaches.

    Introduction

    If you’re a value investor or have been invested in a value fund, you probably aren’t the happiest investor in the world right now. More →