The Payoff and Perils of Momentum-based Stocks

Many investors follow momentum-based methods or approaches when investing in equities, but does momentum investing actually work and what are the results? This is the basis for a recent AAII article by Charles Rotblut, CFA, vice president at AAII and editor of the AAII Journal. Relative price strength, which compares the price performance of a […]

Good Strategies Look Beyond Earnings

Whether it’s talk about earnings growth or earnings estimates or price/earnings ratios, stock market news is usually filled with discussions of corporate earnings. But in his latest for Seeking Alpha, Validea CEO John P. Reese says that good investing goes beyond looking at earnings-related metrics. “Earnings don’t always tell the whole story,” Reese writes.  “In […]

Mid Cap Manager’s Rules-Based Method Produces Strong Results

Barron’s reports on mid-cap fund managers Neil Hennessy and Brian Peery, who manage Hennessy Cornerstone Mid-Cap 30. Peery says, “A lot of financial advisors don’t allocate in the mid-cap space, which gives us an advantage.” Mid Caps have outperformed Large and Small Caps over 10, 15, and 20 years, and the Cornerstone Mid-Cap fund has […]

O’Shaughnessy: Timeframe Is Most Investors’ Biggest Mistake

James O’Shaughnessy’s What Works on Wall Street is something of a bible for quantitative investors, and in a recent Investors Podcast, O’Shaughnessy talked about what his vast amount of research has taught him. O’Shaughnessy says it is critical to understand human nature if you want to succeed at investing. While his book detailed how dozens […]

When It Comes To Growth Or Value, Have Your Cake And Eat It Too

It’s extremely common to hear investment commentators talk about “growth” and “value” as though they are polar opposites. But Validea CEO John Reese says not to buy that false notion. “When it comes to investing’s great ‘either/or’ – that is, the growth or value debate – you can have your cake and eat it, too,” […]

O’Shaughnessy Emphasizes the Value of "High-conviction" Buybacks Over the Long Term

Jim O’Shaughnessy, O’Shaughnessy Asset Management, says a long-term investor should be buying now, and compares “low-conviction buybacks” (defined as 5% or less) and “high-conviction buybacks” (over 5%) in identifying attractive stocks. From 1987 to 2014, he says, the return on low-conviction buybacks was 12.1% annually (about 1% over return on all large stocks), but the […]

O’Shaughnessy Emphasizes the Value of “High-conviction” Buybacks Over the Long Term

Jim O’Shaughnessy, O’Shaughnessy Asset Management, says a long-term investor should be buying now, and compares “low-conviction buybacks” (defined as 5% or less) and “high-conviction buybacks” (over 5%) in identifying attractive stocks. From 1987 to 2014, he says, the return on low-conviction buybacks was 12.1% annually (about 1% over return on all large stocks), but the […]

OSAM: Microcaps A Better Opportunity Than PE

Over the past decade or so, investors — particularly institutional investors — have focused more and more on private equity as a way to get exposure to small, potentially high-growth companies. But in a recent research paper, O’Shaughnessy Asset Management’s Chris Meredith and Patrick O’Shaughnessy explain why microcap equities in many cases are a more attractive […]

O'Shaughnessy on Investor Psychology, Bond Market Trouble, and Why Value Wins

In a wide-ranging interview with Barry Ritholtz on Bloomberg View, quantitative investing guru James O’Shaughnessy recently talked about why human beings are such inferior prognosticators compared to computer models, what that means for investors, why stocks may well be safer than bonds over the long run, and why holding period duration is so critical.

OSAM On How To Beat The Tax Man

Often times, investors overlook a key part of portfolio management when buying and selling stocks: tax impact. But in a recent research report, quantitative investing guru James O’Shaughnessy’s firm offers some tips for how to minimize Uncle Sam’s impact on your portfolio.

O'Shaughnessy on Bond Market Risk, And Stock Strategy

After its huge run-up over the past 5 years, does the stock market still have good times ahead? Quantitative investing guru James O’Shaughnessy thinks so. In an interview with Canada’s Globe and Mail, O’Shaughnessy says that back in 2009 his firm looked at how the market would have to do in the next decade just […]

OSAM on the Efficient Market Myth

While many believe that equity markets — particularly large-cap equity markets — are efficient, quantitative investing guru James O’Shaughnessy’s firm says the data shows otherwise. “Our research shows that, with the right strategy and the right discipline, the U.S. large cap market remains very inefficient and — by selecting stocks using historically proven themes — […]

Beating the Market with Growth … and Value

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 James O’Shaughnessy-inspired strategy, which has averaged annual returns of 9.8% since its July 2003 inception vs. 5.3% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring […]

OSAM: How To Win In Emerging Markets

Emerging markets can make for enticing investments, and new research from James O’Shaughnessy’s firm shows how fundamental-focused investors can really take advantage of EM opportunities. “U.S. investors, and other investors around the world, tend to overweight their home country in their equity portfolio,” write O’Shaughnessy Asset Management’s Patrick O’Shaughnessy and Ashvin Viswanathan in a report […]