Bogle, Siegel, O’Shaughnessy: Where Do They Have Their Own Money?

While they have been hit hard over the past year, many of the world’s top investors aren’t shying away from the stock and bond markets, writes The Wall Street Journal’s Eleanor Laise. In fact, many have been snatching up bargain stocks and bonds for their own personal portfolios while most investors have been fleeing the market. “A sampling of high-profile industry veterans, academics and brokerage-firm chiefs reveals that many are hanging on to holdings battered by last year’s market slide and busily hunting down new opportunities, particularly among bonds and beaten-down value stocks,” Laise explains “And they’re generally upbeat about […]

There’s Magic in Greenblatt’s “Magic Formula”

I’ve added a new investment model to my arsenal. It’s based on the “Magic Formula” strategy that Joel Greenblatt outlined in The Little Book that Beats The Market. Some of what you’ll find below is a recap of a post I did last week, but in this post I’ve also included the ten stocks that are currently in my Greenblatt-based portfolio. The beauty, and attractiveness, of Greenblatt’s “Magic Formula” lays in its perceived simplicity. The purely quantitative approach has just two variables: return on capital and earnings yield. Greenblatt’s back-testing found that focusing on stocks that rated highly in those […]

What Does It Mean to be a Value Investor?

In a piece written for Forbes.com’s “Gurus’ Guide to 2009“, John Heins and Whitney Tilson do a great job in examining just what makes an investor a value investor. While value investors come in all shapes and sizes — large-cap, small-cap, activist, non-activist, U.S.-focused, foreign-focused — Heins and Tilson list 12 similarities they share. A sampling: They focus on intrinsic company value and buy only when there is a substantial margin of safety, rather than trying to guess where the herd will go next. They understand and profit from reversion to the mean rather than projecting the recent past indefinitely […]

J. Zweig on Forecasting & Black Swans

Jason Zweig unveils some great research in his latest piece for The Wall Street Journal (“Why Market Forecasts Keep Missing The Mark”). With all sorts of pundits making predictions for where the market will head in 2009, Zweig says you should be skeptical of their forecasts — and your own — a notion that I also examine in detail in my new book, The Guru Investor. Says Zweig, “Nearly all of us try forecasting the market as if each of the past returns of every year in history had been written on a separate slip of paper and tossed into […]

‘Good to Great’ Author Collins: “Those Who Panic, Die On The Mountain”

Jim Collins, author of the top selling business books “Built to Last” and “Good to Great”, speaks with Fortune magazine about what it takes for companies to emerge from difficult periods in history. “A couple of things really jump out,” he says. “No. 1, in times of great duress, tumult, and uncertainty, you have to have moorings.” Highly successful firms have “incredible fabric of values, of underlying ideals or principles that explained why it was important that they existed.” The video below is previous interview Collins had done on the Charlie Rose show and is worth listening to if you […]