The Neff Approach: Low P/Es and Strong Yields Make for Big Profits

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 John Neff-inspired strategy, which has beaten the market by more than 3 percentage points per year since its inception more than six years ago. Below is an excerpt from today’s newsletter, along with several top-scoring stock ideas based on the Neff investment strategy. Taken from the May 28, 2010 issue of The Validea Hot List Guru Spotlight: John Neff Most investors wouldn’t give a fund described as “relatively prosaic, dull, conservative” a second glance. That, […]

Biggs, Mobius Sounding Bullish

Hedge fund guru Barton Biggs says he thinks the market is ready to “pop”, and that the upturn will come very soon. “I think [stocks] are going to stabilize in this general area, and then we’re going to have a significant move to the upside,” Biggs tells Bloomberg. “The market is very, very oversold, and I think we’re going to have a big pop to the upside some time in the next couple of days. I wouldn’t be surprised to see us go to a new recovery high, just to make everybody squirm.” Biggs added that the Europe concerns are […]

Fisher: European Fears Overblown

In his latest Forbes column, Kenneth Fisher says that fears about Europe’s debt problems are overblown, and that credit ratings agencies have only added to the hype. “It’s simply astounding, after all we’ve seen in recent decades, that anyone pays attention to credit ratings put out by the officially sanctioned rating agencies,” Fisher writes. “Moody’s and Standard & Poor’s compound investors’ worst sins, including the tendency to make a mountain out of a molehill.” Noting that Greece’s interest payments were more than twice what they are now back in the late 1980s and early 1990s, Fisher says investors shouldn’t give […]

Yacktman Playing Defense, Waiting for Opportunities

Donald Yacktman has been one of the top mutual fund managers of the past decade, and in a new interview with Barron’s he discusses parts of his value-centric strategy. According to Barron’s, Yacktman looks for well-run firms, particularly those whose stocks are getting beaten up. “When we buy something, we try to look at it as if we were buying a bond,” he says. “If a bond [price] declines, its yield goes up. So if a stock declines, its forward rate of return goes up.” Barron’s says Yacktman “equates this forward rate of return with a company’s free-cash yield”. He […]

Kass: Volatility Distracting Investors from Positives

Columnist and money manager Doug Kass tells CNBC that the recent market turbulence is distracting investors from good news about the U.S. economy, and that high-frequency trading has “so screwed up the market that you can throw out all technicals”. Kass says that while there are fundamental headwinds, the market is offering a strong 8% earnings yield — far above Treasury yields — a good sign. He expects the S&P 500 to trade within a range of about 1080 to 1180 through the summer.