The second lesson goes deeper into discussing what is Value Investing, and the may types and flavors of Value Investing. We look at the evidence of Value Investing performance vs. the market and vs. growth performance, and specifically the performance of the quantitative Value strategies portrayed on this website. We discuss WHY Value Investing beats […]
Archives for 2017
Lesson 1 – Investments vs. Speculations
In this first lesson, we will learn a new tool which will help us avoid costly investing mistakes. We will learn to identify sound investments from speculations so we do not fall into the trap of speculating while we only think that we’re investing. We will see that sometimes it is OK to speculate but […]
Graham’s strategy for the “Defensive Investor” – How It Worked (Back Testing)
A portfolio consisting of 15 stocks which are selected using Benjamin Graham’s Stock Selection Criteria for the Defensive Investor (Graham, B., The Intelligent Investor, Chapter 14) delivers market-beating average annual returns with lower volatility than the market. The following figure describes a simulation of the portfolio’s performance over a period of 18 years, from June 30th, […]
Deep Value Quantitative Strategy – Why It Works
Investing in Deep Value is simple. Just find the securities with the lowest valuation multiples in the market, and build a well-diversified portfolio. You can choose any valuation multiple of your likings, may it be Price/Book, Price/Earning, EV/Sales, EV/EBITDA or Price/Cashflow. The chances are that over time, the portfolio will do well, very well. But as we’ll […]
How to Build a Deep Value Portfolio
Deep Value is a quantitative investing strategy which selects for investment the cheapest stocks in the universe based on a valuation multiple.Value investing in general, and Deep Value in particular, has been proven to beat the market handily in the long term by both practitioners’ experience and academic research. In their book, Quantitative Value, + Web […]
Deep Value Portfolios – How They Worked (Back Testing)
Deep Value is a quantitative strategy that invests in the cheapest stocks of a stock universe. Constructing a Deep Value portfolio is simple – Simply buy a diversified list of cheap stocks based on a single valuation multiple or a composite of multiples. We have tested three types of Deep Value portfolios, each using a […]
Quantitative Value Strategies – A Primer
It seems that almost every investor today is a value investor. Since Value Investing is such a broad term, the ways to employ a value investing strategy are endless. The definition of Value Investing is investing in stocks in which their market price is lower than their intrinsic economic value, and holding them until the […]
Establishing a Quantitative Stock Portfolio – An Overview
Establishing a stock portfolio using a stock screen consists of the following steps: Selecting an investment strategy which fits one’s temperament, worldview, and preferences for returns vs. volatility. Defining the universe of stocks to choose from. Deciding on the amount of diversification wanted, i.e., how many stocks to hold. Deciding on how the portfolio would […]