Investing in “high-quality” stocks sounds like a no-brainer. But in a very interesting piece on ETF.com, Vitali Kalesnik and Engin Kose of Research Affiliates show that quality metrics alone don’t provide the boost to returns you might expect. (H/T Stingy Investor)
Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Joel Greenblatt-inspired strategy, which has averaged annual returns of 10.7% since its late 2005 inception vs. 5.3% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Greenblatt-based investment strategy.
Taken from the September 12, 2014 issue of The Validea Hot List
Can a single page of a book change your investment life? We believe it can. Periodically, we highlight some of the Great Pages that have had a great impact on our investment philosophy. Today, we look at p. 194 from Martin Zweig’s “Winning on Wall Street”, in which Zweig first discusses stock-picking using a “rifle” approach (deeply analyzing a small number of companies), and then talks about the “shotgun” approach (screening thousands of stocks against pre-set criteria).
In a wide-ranging interview with Barry Ritholtz on Bloomberg View, quantitative investing guru James O’Shaughnessy recently talked about why human beings are such inferior prognosticators compared to computer models, what that means for investors, why stocks may well be safer than bonds over the long run, and why holding period duration is so critical.
Top bond investor Kathleen Gaffney thinks bonds are very risky, and has made stocks and cash a major part of her portfolios.
Charles Schwab Chief Investment Strategist Liz Ann Sonders thinks the US is still well positioned compared to the rest of the world, but she also thinks it’s not a time for wild bullishness.
While many investors are worried that several conflicts around the globe will mean disaster for stocks, Kenneth Fisher says history offers a different lesson.