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Validea

June 18, 2019

Some Lessons For My Former Investing Self

One of the most dangerous games we all can play in investing is the game of looking back and thinking about what we should have done. Hindsight bias leads us to believe that we should have known all sorts of things that there was no way to know at the time, and that leads to conclusions that would have been very difficult to draw with the information that was available then.

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Interactive Advisors

June 18, 2019

Focus on What Matters

In the money management industry, the holy grail is outperforming the overall market over a long period of time. For most practitioners, that means beating the S&P 500 Index.

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Validea

June 4, 2019

What Quant Value Models Can and Can’t Do for You

A few years ago Griffin wrote a very good piece — Ben Graham’s Value Investing ≠ Fama/French’s Factor Investing — explaining why buying stocks based on measures like book-to-market (the inverse of price-to-book) is nothing like the Ben Graham / intrinsic value way of investing.His comment and his previous piece got me thinking about how important it is to understand what quantitative value models can and can’t do.

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WisdomTree

May 30, 2019

Platform Businesses: What They Are and Why Own Them

On last week’s episode of the “Behind the Markets” podcast, I was joined by Alex Moazed, Founder and CEO of Applico, and Rafi Aviav, head of WisdomTree Europe’s Product Development team, for a discussion on platform businesses. Moazed described platforms as companies that do not own the means of production but rather the means of connection.

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Invesco US

May 28, 2019

Small-Cap Stocks: Why Patience Matters

The payment sector has been the darling of Wall Street the last few years and has continued to be an active space with several mega-mergers. Only four months into 2019, the payment sector already reached $85 billion of merger and acquisition announcements — almost doubling the full-year record of $49 billion in 2018.1 I expect the trend to continue.

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Validea

May 28, 2019

Differences in Value

As an investor, understanding why there can be such big differences between value portfolios can be a very important question to answer. To get at that answer, at least partially, I thought I’d look across the spectrum of value models run on Validea to see how value stock selection strategies can differ and what investors may be able to learn from this.

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Smartkarma

May 23, 2019

Exchanges Redefine Their Role as More Than Just Listing Boards

Choosing an exchange on which to list might be one of the most important decisions a company will ever make.The reasons underpinning this may vary from one company to another but some common denominators remain. Among them, metrics like Average Daily Trading Volume, which serve as a reliable indicator of market liquidity.Liquid boards make it easy to buy and sell securities. As such, they tend to carry greater investor appeal. This might explain, at least in part, why some companies choose to list on foreign exchanges instead of those in their home markets.

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Smartkarma

May 16, 2019

IROs Often Wait Until Earnings Season to Engage Investors. They Shouldn’t

News headlines like “Company X Beats Analyst Estimates in Full-Year Earnings Report” and “Shares of Company Y Plunge on Biggest Loss in Decade” are not rare to see during earnings season. They typically have the power to move markets, sending share prices of the companies in question climbing or plummeting. In light of what’s at stake, it’s perfectly understandable that most, if not all, investor relations officers (IROs) spend an inordinate amount of time preparing for an earnings event.

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BCMStrategy

May 15, 2019

How to Trade the News: Rule 9 – The Role of Alternative Data

Investors need data the way people need oxygen. Capital markets have consistently been on the frontier of technological innovation precisely for the purpose of acquiring more and better information faster. Before we had Twitter, there was the ticker tape, the wire services, and then the Bloomberg terminal.

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Validea

May 14, 2019

Five More Questions: Factor Investing with Jim O’Shaughnessy

This is Part II of my interview with Jim O’Shaughnessy. If you missed Part I, you can find it here. In part II, we talk about trend following, the future for simple value investing, and we take an in depth look at some of the arguments others have made in favor of the death of value investing.

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Interactive Advisors

May 14, 2019

How To Learn From Investing Setbacks

Investing is very similar to building something with the aim of designing something flawless, the portfolio equivalent of the Taj Mahal. If you look at the portfolio of public holdings at Berkshire Hathaway (BRK/A), you can discover what I am talking about. In my opinion, the company has assembled a group of wonderful companies and businesses, with one holding more impressive than the next.

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BCMStrategy

May 8, 2019

How to Trade the News: Rule 8 – The Importance of Nowcasting

When capital markets interact with the news cycle and public policy, the focus usually is on the ultimate outcome. But today we suggest that this long-term focus is misplaced, even for macro and bond market investors. Capital market participants must mark their portfolios to market daily and adjust their exposure to risk accordingly. Adjustments can take the form of new or additional hedging activities, as well as asset disposition.

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Franklin Templeton

May 3, 2019

Is Your Portfolio Prepared for a Potential Wildfire?

In the decade since the global financial crisis, many investors have either actively steered—or ended up with—a large portion of their portfolios in investments tied to economic growth, namely stocks. However, as global growth begins to slow, Wylie Tollette, Head of Client Investment Solutions, Franklin Templeton Multi-Asset Solutions, thinks it’s a good time for growth-focused investors to do a portfolio check-up.

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Validea

April 30, 2019

The Mechanics of Value Investing

We all have a tendency to want to put investing strategies into groups. That can sometimes be misleading, though. There are more investment products than I can count that use the word value in their name. But beneath the surface, many of those products couldn’t be any more different. Those differences can lead to substantially different outcomes in both the long- and short-term, so it is very important to understand the investment process and parameters used to create any value portfolio before you invest in it. Since I often discuss value investing in my articles, I thought it might be helpful to take a step back and look at some of the important details to consider when building or analyzing any value strategy.

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Validea

April 23, 2019

Five Questions: An Academic Look At Factors With Lu Zhang

One of the major challenges that the finance community has faced over the years is how to explain what drives stock returns over time. If the market is efficient, then the only way to generate excess returns is to take more risk. But risk only makes sense to take if you get compensated for it. Determining which risks receive that compensation has been the subject of significant research in the academic community for many years.

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