Articles

Articles Written by Validea Founder John Reese

8/24/2016

John Reese Forbes Articles
Forbes Magazine

Escape Volatility In These Graham-And-Doddsville Stocks

In 1984 Warren Buffett delivered a speech at Columbia Business School that has become something of a manifesto for value investors. In the speech, entitled "The Superinvestors of Graham-and-Doddsville," Buffett talked about a small group of investors who worked under Benjamin Graham (the man known as the "Father of Value Investing") and David Dodd at the Graham-Newman Corp. in the mid-1950s. Three of the firm's four associates-Walter Schloss, Tom Knapp and Buffett-established easily traceable and tremendous track records after leaving the firm (they nearly doubled the S&P over periods ranging from 13 to 28 years).

8/23/2016

John Reese TheStreet.com Articles
TheStreet.com

5 Stocks the World's Greatest Investors Would Love

Numbers and sports go hand-in-hand. Millions of viewers have witnessed Jamaican gold medalist Usain Bolt sprint across the finish line 8/100ths of a second ahead of No. 2 Justin Gatlin. The movie Moneyball taught us how Oakland Athletics general manager Billy Beane used analytics to resurrect his baseball team. Watch a football game on any given Sunday and hear a steady stream of statistics spilling out of the broadcast booth. Sports are only one example of how data can be useful, however. The importance of numbers in finance may seem painfully obvious, yet it's not unusual to hear people discuss markets and investments under a shroud of hearsay and superstition.

8/22/2016

John Reese Forbes Articles
Forbes

Stop The Insanity And Stick To Fundamentals Like Buffett, Graham And Greenblatt

These are turbulent times, no doubt. We're heading into a presidential election where the two candidates have the highest disapproval ratings in history. Political and economic unrest is mounting around the world. Debates continue on such heated topics as terrorism, immigration, gun control and taxes. We're waiting for the fallout of Britain's history-making vote to leave the EU. Domestic earnings figures continue to disappoint yet the S&P 500 is at an all-time high. As an investor, it can be hard to sift through all the noise and know where to put your money. Add to the mix the buzz around crude prices, interest rates and myriad market indicators-not to mention the onslaught of media talk-and it's enough to spin any head.

8/16/2016

John Reese Forbes Articles
Forbes

Martin Zweig: Shotgun Stock Hunter

After the passing of Martin Zweig in 2013, Liz Ann Sonders recalled a comment by the market sage: "Summing it up, to succeed in the market you must have discipline, flexibility-and patience. You have to wait for the tape to give its message before you buy or sell." Sonders, chief investment strategist at Charles Schwab & Co., worked for Zweig from 1986 to 1999 and considers him a mentor. At Validea, we view growth investor Martin Zweig as one of the more colorful gurus. He began following the stock market at 13 years of age, impressing his high school teachers with his vast knowledge on the subject. He graduated with an economics degree from the Wharton School, where he took "every stock market course offered," then received an MBA from the University of Miami. A few years later, he earned a Ph.D. in finance from Michigan State University, where he conducted ground-breaking research in the field of stock analysis.

8/16/2016

John Reese NASDAQ Articles
NASDAQ.com

The Best of Both Worlds: Blending Value and Momentum

As we know, the stock market can be fickle in the short term. There is no single investment strategy that offers a fool-proof method for earning returns and/or mitigating risk. Further, jumping from one approach to another while trying to predict what will happen next can lead to losses in the long run. Since different methodologies perform well at different times, a good plan is to take a blended approach when writing your investment playbook.

8/10/2016

John Reese TheStreet.com Articles
TheStreet.com

4 Stock Picks Using This Market-Beating Manager's Low P/E Method

It is easy for investors to get tempted by the exciting stocks of companies on the cutting edge of innovation or enjoying the media limelight. As the market continues to advance, however, bargains are getting harder to find. To find upside potential, investors must ferret out opportunities that may be overlooked or seem unattractive for one reason or another. That is precisely the philosophy of investing legend John Neff who from 1964 to 1995 managed what he described as the "relatively prosaic, dull and conservative" Windsor Fund.

8/9/2016

John Reese Globe and Mail Articles
The Globe and Mail

Three Stocks to Help You Mimic the All-Time Great Investing Champions

Every two years, alternating between summer and winter sports, the Olympics not only inspire millions of spectators, they give investors some key insights for successful investing. What's obvious is that Olympic athletes have natural talent. But they're not just relying on good genes to reach the podium. They spend years training, developing discipline and perfecting their skills. They put together a training plan, often with a coach, and they stick to it. Smart investors follow the same approach, setting long-term goals and putting their money to work toward achieving them. They are disciplined, maximizing their retirement fund contributions and devoting a consistent portion of income to investing.

8/8/2016

John Reese NASDAQ Articles
NASDAQ.com

Finding Opportunity in Valuation Differentials

As the buzz of conjecture continues around the expensive market and how this extended bull must be running out of road, an interesting situation has emerged in the form of expanding valuation spreads when comparing the cheapest stocks in the market to the market itself.

8/2/2016

John Reese TheStreet.com Articles
TheStreet.com

Cash in on Pokemon and Augmented Reality with these Four Stocks

When Pokemon Go was released earlier this month, millions of folks hurled themselves into the world of augmented reality (AR), a process whereby a digital world is layered over the real one. In the case of Pokemon Go, that digital world is rife with cute little animals and players are sent on hunting expeditions in public places (using their device's GPS and camera) to catch as many as possible. Not to be confused with virtual reality (VR), in which you could be standing alone in a closet and be transported to, say, court-side seats at a virtual Knicks game. By contrast, AR brings digital interactions to your actual location.

8/1/2016

John Reese Forbes Articles
Forbes

Four Financial Stocks To Consider As A Rate Hike Looms

Now that financial markets have more or less stabilized in the wake of Brexit, it seems likely that the Fed will consider a rate increase as we move into the back half of 2016. But then again, it depends on who you ask. The economic landscape over the last several months has taken us from a bleak jobs report in May to brief post-Brexit investor panic to a bounce-back in hiring and all-time highs in equity markets. There were those who thought the Fed would move this past Wednesday and there are those who think things will stay unchanged through the end of the year.

8/1/2016

John Reese Globe and Mail Articles
The Globe and Mail

An Alternative to the Fickle Fortunes of Growth Stocks

Netflix Inc. looked about as perfect as could be. In 2015 alone, the stock was up 134.3 per cent. Analysts had it on a trajectory to achieve a $100-billion (U.S.) market capitalization by the end of the decade. But recently the tech darling had a disappointing announcement: The growth of its streaming video service had slowed significantly. Its shares instantly shed 16 per cent and so far in 2016, the stock has lost almost 25 per cent of its value. Stocks of growth companies such as Netflix get a lot of attention because they have the potential to soar. But being trendy also means growth stocks are prone to attract investors with high expectations.

7/15/2016

John Reese TheStreet.com Articles
TheStreet.com

3 Stocks to Rise From the Appetite for Healthier Foods

There is a growing trend in this country toward eating healthier in general and, specifically, toward eating organic, and investors should take note. Consumer demand in this segment has grown by double digits just about every year since 1990, according to the Organic Trade Association. Between 1997 and 2015, sales of organic products increased from $3.6 billion to $43.3 billion and don't show signs of slowing down.

7/15/2016

John Reese Forbes Articles
Forbes

When It Comes To High-Dividend Stocks: Caveat Emptor

As low interest rates continue to underwhelm investors, high-dividend-yield stocks seem to be just the ticket. But before pulling the trade trigger, you might want to listen to the voice in your head whispering "there's no free lunch." While high dividend yields (yield defined as dividend divided by stock price) are appealing, they become less so if they're a function of a low stock price that reflects underlying financial weakness. So, while announcements or news items that drive a stock price down may increase yield, an investor has to determine if it's a good time to buy or if the stock should be avoided.

7/13/2016

John Reese Globe and Mail Articles
The Globe and Mail

Valuable Lessons From Brexit, And Three Stocks For The Long-Term Investor

Last Friday's U.S. jobs report sent the markets skyward, and by Monday the Standard & Poor's 500 had returned to a new record high, dulling the memory of the decline that followed the June 23 vote by Britain to exit the European Union. The lesson: Short-term shocks don't necessarily lead to permanent damage. It is a predictable pattern, but one that jittery investors too often forget. Markets tumble at the hint of bad news, but more often than not they rebound. Look at the 2008 financial crisis to illustrate this point.

7/11/2016

John Reese NASDAQ Articles
NASDAQ.com

Do Good Things Still Come in Small-Cap Packages?

Over the past several years, small-cap fund performance has come under scrutiny and the credo of the "small-cap premium" has all but evaporated. The notion, that an investor should earn a premium for investing in smaller companies due to the increased risk associated with them, was not considered a violation of market efficiency but rather a compensation to the investor for investing in companies with vulnerabilities.

7/6/2016

John Reese Forbes Articles
Forbes

European Blue Chip Stocks On Sale

The wake of panic left by the unexpected U.K. vote to leave the EU has made the prospect of bargain hunting European stocks pretty enticing. According to Jason Zweig of the Wall Street Journal, those investors who can endure all the conjecture about the "Brexit" impact stand to gain the most. He says, "Investors hate uncertainty, but they despise surprise." In a recent interview with CNBC, Wharton School professor of finance Jeremy Siegel added, "Europe might seem cheap for a while. I think it's rewarding if people want to invest for 3 to 5 years."

7/4/2016

John Reese Globe and Mail Articles
The Globe and Mail

Nine U.S. stocks For Investors Waiting On The Sidelines

We've all been there: You're out on a date, the night has gone well, and now there's a pause in the conversation as you stand outside the restaurant and prepare to say good night. Eyes meet. Pulses pound. Should you move in for the goodnight kiss? You start to, but then hesitate, fearing rejection. You start again, stop again, and, before you know it, your date is gone and the opportunity has passed.

7/1/2016

John Reese AAII Articles
AAII

Going From Stock Screen to a Real Portfolio

Not all that long ago, "stock-picking" entailed tedious, relentless research. In order to get the complete financial picture of a firm and its shares, individual investors had to scour the pages of financial newspapers or pore over scores of thick, dull annual reports. You either spent hours upon hours in the local library or you turned your study into a repository for piles upon piles of financial documents.All that changed with the arrival of the Internet Age. Today, quantitative stock-picking screens are just about everywhere.

6/30/2016

John Reese TheStreet.com Articles
TheStreet.com

5 Top Stocks Investment Guru Joel Greenblatt Would Love

The term "magic" isn't often used in discussions concerning the stock market. Everyone knows or should know that there is no way to time the market or guarantee gains. At Validea, however, we have built our stock screening strategies on fundamental analyses employed by some of the most successful market gurus.

6/27/2016

John Reese NASDAQ Articles
NASDAQ.com

Investors Should Get Down To (The) Business

To many investors, a stock is a piece of paper - one whose value goes up and down just about every minute of every day. They see investing as a game in which one tries to predict which direction that value will go in the short term, using intuition, hunches, and trendlines. Benjamin Graham knew better. Known as the "Father of Value Investing" - and the mentor of Warren Buffett - Graham essentially invented the field of security analysis. And he realized that trying to predict how stocks will behave in the short-term was an incredibly difficult, if not impossible, task.

6/24/2016

John Reese TheStreet.com Articles
TheStreet.com

5 Utility Stocks to Buy When the Markets Are Tanking (See: Brexit)

"During these dog days of low interest rates, utility stocks can offer the low risk of bonds without the paltry returns that fixed-income generates. Take Friday, for example. Major U.S. stock market indices are down 2%-3% on the Brexit vote results, but utility stocks are up. Investors are seeking lower volatility in this uncertain environment. And it's not just Friday. The Dow Jones Utility Average just hit an all-time high, and utility stocks are some of the best performers so far this year. The utility sector as measured by the Utilities Select Sector SPDR (XLU) is up 17% so far this year, vs. the 0.1% gain for the S&P 500.

6/20/2016

John Reese TheStreet.com Articles
TheStreet.com

5 Top Restaurant Stocks With Solid Prospects and Fundamentals

The restaurant industry has seen moderate growth for each of the past six years, a trend that is expected to continue this year, with sales reaching $783 billion, according to the National Restaurant Association. Market research firm NPD estimates that restaurant traffic will increase by 1% this year and growth will probably remain at that level for the next several years.

6/10/2016

John Reese Forbes Articles
Forbes

MetLife, Baxter And 3 Other Contrarian Value Opportunities

At Validea, many of the investment gurus we reference in our stock screening models have become successful by marching to a different market drummer. Rather than follow the crowd, these legends have focused on stocks that not only have fallen out of favor, but that no one will touch. One such guru is David Dreman, chairman and chief investment officer of Dreman Value Management and considered by many to be "the consummate contrarian."

6/7/2016

John Reese Globe and Mail Articles
The Globe and Mail

Three Solid Stocks That Should Hold Up in Good Times and Bad

Weak economic data in North America, continuing sluggishness in China, beaten-down commodity prices, the spectre of interest rate hikes, stumbling corporate profits - all of these factors (and others) have sparked fears among investors at one point or another this year. Throw in a bull market that is now more than seven years old and that, in the United States, has made stocks fairly pricey, and you can see why Google searches for "recession" and "bear market" have hit their highest levels in several years in 2016.

6/7/2016

John Reese TheStreet.com Articles
TheStreet.com

4 Value Stocks to Buy as the Cycle Reverses Away From Growth

Value stocks have under-performed growth stocks significantly since the 2008 financial crisis. The Federal Reserve's rock-bottom interest rate policy, along with anemic economic growth, are factors that have favored growth names and hurt value. For the past three and five years ended June 3, the Morningstar U.S. Growth Index has generated returns of 12.44% and 12.60%, respectively, compared with 8.87% and 10.65% for the Morningstar U.S. Value Index.