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Learning from Buffett and Others During Market Crises
While no one has the answers to how deep this downturn will be and how far stocks will fall, there have been other market crises in the past. Leaning on the wisdom of great investors, particularly during times such as these, can help give us the conviction to make it through.
Some Thoughts on Market Panics
In this episode, we talk about some important lessons to keep in mind during market panics and some strategies investors can use to manage them.
Five Questions: The Future of Asset Management with Meb Faber
Meb Faber and his team have built Cambria into a $700 million+ asset management firm during a period where many small managers have been struggling.
The Pros and Cons of Trend Following
To say that the track record of market timers in general is dismal would be an understatement. There are so many factors that impact market returns that getting them all right is next to impossible. And even if you do, figuring out what is and is not already priced in can be an equally fruitless exercise.
The Dangers of Headline Investing
The recent market sell off related to the Coronavirus has many investors worried. And with good reason. When panics like this set in, we all tend to focus on worst case scenarios and want to take action in response.
The Mechanics of Value Investing
In this episode, Jack and Justin, partners at Validea, talk about the mechanics of systematic value investing and the many decisions that go into constructing a value portfolio.
Some Thoughts on the Struggles of Factor Investing in the Past Decade
The Importance of the Sector Story
The Elusive Definition of Risk
Risk is one of the most challenging concepts to define in investing. There are countless ways to measure it and a myriad of opinions on the proper way to evaluate it. And the debate over risk is not some theoretical academic debate that doesn’t impact everyday investors.
Learn from Peter Lynch but Don’t Think You Can Replicate Him
Lessons From Our Most Read Five Questions Interviews
Now that we have completed our first year, I thought it might be interesting to take a look back at our most popular interviews and some of the important lessons that I learned from them. Below are our five most read interviews from our first year and the key lesson I took from each of them.
The Danger of Overscrutinizing Out of Favor Investment Metrics
No investing factor has been maligned more than the Price/Book in recent years. In a period where value in general has performed very poorly, the Price/Book has struggled more than any of the other common value factors. When you couple that with the fact that the Price/Book’s failure to account for intangible assets makes its validity questionable in a world where more than 80% of assets are intangible, you have a perfect storm for investors challenging the long-term validity of the factor.
Five Questions: The Man Who Solved the Market with Gregory Zuckerman
How was a mathematician with no formal stock market training able to produce those kinds of returns? That is the subject of the new book The Man Who Solved the Market by Gregory Zuckerman. We are very fortunate that Greg has agreed to join us this week for our Five Questions interview.
A “Protective” Alternative to the 60/40 Portfolio
A Framework to Evaluate Value Strategies
When I talk about value investing, I am talking about a more traditional definition of it. That means buying cheap stocks relative to current fundamentals. That could mean earnings or cash flow or book value or sales or a variety of other metrics. There are some funds out there that use the word “value” in their name, but don’t fit into this traditional value mold.
The Facts About Buybacks
Before we debate the merits of buybacks, it is important to understand what they are. Profitable companies generate excess cash on a regular basis. They have a variety of options for what to do with it. They can reinvest it back in their business. They can just keep it in the bank. They can buy other companies with it . They can pay down debt. They can pay dividends. They can also buy back their own stock.
Five Questions: Tackling Some of the Toughest Questions in Investing with Michael Mauboussin
There are many skills that can benefit you as an investor. Being smart is certainly an asset, although it can also get you in trouble if you don’t know your limitations. The ability to control your emotions is also a huge plus. But I think the most important skill may be the ability to think critically.
Five Questions: Factor Timing with Nicolas Rabener
Factor timing is a pretty controversial topic in the quantitative investing world. On one hand, we are all taught that we should buy low and sell high, so it seems intuitive to add exposure to factors that are out of favor. But in reality, it isn’t that simple and factor timing is much more difficult than it would seem in theory.
The Rising Bar for Active Management
Why Use One Value Factor When You Can Use Many
Why Return Skewness Offers Some Hope for Value Investors
Never Say Never
A New Method for Rebalancing Helps Systematic Models Get Better
What I Do With My Personal Portfolio
Every person is unique and everyone has many different factors that impact how they manage their money. I think looking at someone else’s portfolio is much more useful from the perspective of analyzing the thought process they use to arrive at what they own rather than a recommendation to own any of those things.
Five Questions: Hidden Risks in Investing with Corey Hoffstein
Investing in the stock market is a risky activity. The obvious risks like losing a large portion of your portfolio during a bear market, or underperforming the market by a wide margin if you employ an active strategy can be more than many investors can handle.Given th high level of risk that is inherent in investing, it doesn’t make sense to take more risk than you have to.
Five Questions: Lessons From Finance History with Jamie Catherwood
It is clear we can all benefit from some more knowledge about market history. And that is the focus on our interview this week. Jamie Catherwood is known as “the Finance History Guy” on Twitter. Despite just graduating college in 2017, he has used his deep knowledge of finance history and his impressive networking skills to amass over 16,000 Twitter followers (yours truly has barely crossed 1000). He also was recently hired as a Client Portfolio Associate at O’Shaughnessy Asset Management.
Six Common Misconceptions About Factor-Based Strategies
Five Questions: Questioning Conventional Wisdom With Lawrence Hamtil
My favorite people to follow on Twitter are those who make me think about things in different ways than I currently do. One person who certainly fits that bill is Lawrence Hamtil of Fortune Financial Advisors. In this interview, we will cover those topics, as well as several others that might make you challenge what you think about some popular investing topics.
The Lure of the Unsolvable Problem
Just when you think you are good at investing, the market has a way of humbling you and making you realize that no one will ever completely figure it out. That may sound like a stressful thing, but in reality, it is what makes doing this job great. For someone who strives to constantly learn and to constantly improve, there is nothing better than something you can never get too good at.