Our Factor-Based Models Have Substantially Outperformed the Market Since 2003
| Guru Based on | Number Of Stocks |
Rebalancing | Annual Return |
|---|---|---|---|
| Motley Fool | 10 | Monthly | 11.8% |
| Benjamin Graham | 10 | Annual | 10.6% |
| Martin Zweig | 20 | Quarterly | 10.6% |
| Peter Lynch | 20 | Monthly | 9.9% |
| Kenneth Fisher | 10 | Quarterly | 9.2% |
| James P. O'Shaughnessy | 20 | Monthly | 7.8% |
| Warren Buffett | 10 | Monthly | 6.9% |
| Joseph Piotroski | 20 | Annual | 6.1% |
| John Neff | 20 | Quarterly | 4.9% |
| Joel Greenblatt | 10 | Monthly | 5.1% |
| David Dreman | 10 | Monthly | 4.0% |
12/10/2018
By Justin Carbonneau (@jjcarbonneau)
The original “hierarchy of needs” model was developed by Abraham Maslow in 1943. Maslow proposed the hierarchy as a way to understand human motivation and later extended it to human curiosity. The hierarchy can be viewed as a pyramid with layers, which included things like “physiological,” “safety,” “belonging and love,” “esteem,” and “self-actualization”. Each part builds off the one below, and before one could move up the pyramid the existing layer would need to be understood and internalized.12/5/2018
By Jack Forehand (@practicalquant)
Wall Street prediction season is upon us. It is the time of year when all the major investment banks and market pundits will issue their 2019 market outlooks. They will tell you what they think will happen in the next year and will even by nice enough to give you exact price targets they think the S&P 500 will reach by year end. Unfortunately for all of us, those predictions won’t be worth that much.11/28/2018
By Jack Forehand (@practicalquant)
The day you begin to follow a new investment strategy is typically a day of optimism. You have done your research, you have looked at the historical results, you believe in the investment process, and you expect to see similar returns in the future to what the strategy has done in the past. You have even potentially looked at the ups and downs of the strategy and are prepared for the fact that the ride won’t be one that goes straight up. And then you invest your money and reality sets in.11/21/2018
By Jack Forehand (@practicalquant)
An investor who has been investing the past 20 years has seen two bear markets. Both of them included declines of over 40%. Based on that, the tendency is to think that the term "bear market" is synonymous with that type of decline. The tendency is to think that the only type of bear markets that occur are the ones you have experienced yourself. The reality, though, is that all bear markets are different. The major declines we have seen in the past two are actually the exception rather than the rule.Validea researched history's top stock pickers and developed computer models that mimic the approaches these gurus used to beat the market over lengthy periods of time. The Guru Investor is your guide to the gurus we follow and their strategies.
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