The Two-Pronged O’Shaughnessy Attack

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 […]

Don’t Be a Bottom-Hunter

The big question in the market these days seems to be, “Have we hit a bottom?” After enduring a bear market that has lasted nearly 18 months and cut the value of the S&P 500 in half, it’s certainly a reasonable question. But in the latest issue of my Validea Hot List newsletter, I explain that now is no time to be sitting on the sidelines trying to wait for a clear, precise bottom. In reality, any bottom-call is just an educated guess — and, given the depth of this crisis, the unprecedented government actions made in response to it, […]

A Little Consistency, Please

Earnings: It’s been a dirty word for the past several months, as companies across the country have been posting some ugly results and slashing estimates of future earnings. Standard & Poor’s is now projecting $54.70 in 2009 operating earnings per share for the S&P 500, and just $41.88 per share in as-reported earnings for the index’s components. By comparison, as recently as 2007, operating earnings for the S&P 500 were $82.54 per share, and as-reported earnings were $66.18 per share. Given the bleak earnings climate, I thought it would be interesting to focus on a quality valued by several of […]

Hot List: How to Combine Strategies to Minimize Risk, Maximize Returns

In my new book, The Guru Investor, I detail ten of the best-performing stock-picking strategies of all-time. These guru-based approaches are a great way to get a leg up on the market, but, as I’ve found over the years, having a proven stock-picking methodology is just one part of the path to market-beating returns. Stock investors also must deal with a number of portfolio management questions, such as, “Which strategy is best for me?”, “How many stocks should I own?”, and, “When should I sell?” As I’ve worked with my guru-inspired models over the years, I’ve learned a great deal […]

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 […]