In his latest market commentary, Jim O’Shaughnessy writes that the market is seeing a major flip-flop in leadership similar to what often occurs at the end of recessions, and says that, despite the recent run-up, it’s still a good time to buy stocks. “While many of the once-in-a-lifetime bargains are gone, stocks still look attractively valued,” O’Shaughnessy writes on his asset management Web site. He cites the normalized price/earnings ratio of the S&P 500 (a measure that uses five years worth of earnings — 18 quarters of historical data plus two forecasted quarters) as evidence. When normalized P/Es are low, […]
Even after the market’s recent rally, Jim O’Shaughnessy is continuing to see a myriad of values in the market, he recently told CNBC. “I think it’s very sustainable,” O’Shaughnessy, the fund manager and author whose study of quantitative strategies and historical stock market returns is one of the most extensive in history, said of the rally. “I think what happened is we priced a Great Depression and we got a deep recession. And I think the difference between that makes this a very sustainable market. … It’s absolutely … one of the best markets for finding stocks with all of […]
In every other issue of my investment newsletter, The Validea Hot List, I look in detail at one of the computerized guru models I run on Validea.com. In this week’s issue, I outlined the growth/value strategy that James O’Shaughnessy found produced tremendous results over more than four decades. Below you will find an excerpt from the newsletter along with a handful of top-scoring stock ideas based on the O’Shaughnessy investment strategy. Taken from the April 3, 2009 issue of The Validea Hot List To say that James O’Shaughnessy has written the book on quantitative investing strategies might be an exaggeration […]
James O’Shaughnessy, the fund manager whose study of four-plus decades of stock market returns may be the most extensive ever done, is seeing good times ahead for U.S. stocks. In an interview with Reuters, O’Shaughnessy says that the S&P 500 is now selling at such depressed levels that it is likely to return 7.3 percent per year — after inflation — from now through 2019. And he thinks there is a “good chance” that the S&P will hit 900 this year.
Jim O’Shaughnessy, Chairman and CEO of O’Shaughnessy Asset Management, believes that equity valuations “present buying opportunities akin to 1974 and 1982.” He writes that investors need to ignore short-term volatility and market-bottom calling, and instead focus on where stocks will be three to five years from now. O’Shaughnessy offers a number of historical stats that put the recent decline, volatility and opportunity in context. One is that “there have only been 66 days that the Dow closed +/- 6% (total return) from the previous close. Eight of those days (12%) have come since September 29th of this year.” Second, according […]