Buffett’s Patient Approach to Investing

In a recent article for Forbes, Validea CEO John Reese discusses Berkshire Hathaway’s current stockpile of cash and how Buffett, who Reese refers to as a “Patient Investor”, approaches both choosing opportunities and making investments with care. Reese cites a Bloomberg article that describes Buffett’s investing principle: “There’s no need to chase deals,” it says, adding that Buffett likens investing to hitting a baseball. “Don’t swing at one that’s out of your comfort zone.” Using stock screening models he created based on the philosophies of Buffett and other market greats, Reese identifies the following high-scoring stocks: Credit Acceptance Corp. (CACC) […]

Keys to Investing Success and Solid Picks

In a recent Forbes article, Validea CEO John Reese shared a list of core investing concepts outlined in an essay for the CFA institute by Vanguard founder Jack Bogle, and offered parallels with tenets of market gurus such as Warren Buffett, Peter Lynch, and Joel Greenblatt: Invest you must. Failure to earn an adequate return is riskier than short term market volatility. According to Joel Greenblatt: “The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think.” Time is your friend. Benjamin Graham referred to compounding as the “eighth wonder […]

Finding a Hidden Gem is Harder Than You Think

Since its 1990’s beginnings as an online bookseller, Amazon has grown into a behemoth that has “irreversibly changed the way consumers shop for everyday goods and read and watch media and entertainment,” writes Validea CEO John Reese in a recent article for Nasdaq. But scoring a hidden gem like Amazon early on, says Reese, is no easy task. “More often than not,” he writes, “investors who carefully select stocks of strong companies and diversify their portfolios across a wide range of securities are going to make money, but not make it rich on those investments alone.” According to research conducted […]

Keys to Success from Bogle, Buffett and Others

In a recent Forbes article, Validea CEO John Reese shared seven keys to investing success from such legends as Warren Buffett, Joel Greenblatt, Jack Bogle and Peter Lynch. Here are some highlights: Time is your friend—take advantage of compounding returns. Impulse is your enemy—emotional investing decisions are a bad idea. Basic arithmetic works—be mindful of transaction costs and fees. Stay the course—stick to your investment plan. Using his stock screening models, Reese identified the following high-scoring picks: ManpowerGroup (MAN), a provider of workforce solution and services, earns high marks for persistent growth in earnings-per-share and a favorable price-sales ratio. Nissan […]

Validea Hot List Newsletter: Spotlight on Guru John Neff

In our most recent Validea Hot List newsletter, we highlight the investment philosophy of John Neff, who managed the Vanguard Windsor Fund from 1964 to 1995 (during which time the fund averaged a 13.7 percent return versus the S&P 500’s 10.6 percent). Neff’s strategy focused on the price-earnings ratio as a gauge of investor expectations for a company’s future growth—an important factor according to this market guru. We explain the Neff methodology, founded on the notion that “high-flying growth stocks with high P/Es were very sensitive to any disappointment compared to expectations,” while he found low P/E stocks to have […]