Excess Returns Podcast

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics with the goal of helping those who watch and listen become better long term investors, all in twenty minutes or less per episode. The podcast is available on YouTube and on all the major podcast platforms. You can click the links next to each episode below to watch or listen to it on your preferred platform.

If you enjoy the podcast, please follow us on YouTube or subscribe or write a review on iTunes. If you have any questions or feedback, you can email us at podcast@validea.com.

Introducing Excess Returns

1/27/2020

Episode 8: The Perils of Market Forecasting

We have just completed market prediction season. Its the time of year where there are countless forecasts about what the economy will do in the new year. Its when experts tell you what interest rates will do for the year. And most of all, its when you see a variety of predictions for where the S&P 500 is heading this year. The experts making these predictions even do you the favor of giving you exact price targets so you know exactly what will happen. But there will be one major problem with almost all of these predictions: they will be wrong. In this week's episode, we discuss why market forecasting is so difficult and highlight some of the tricks that market forecasters use to make their predictions seem better in retrospect than they actually were.

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1/20/2020

Episode 7: The Challenges of Developing a Sell Strategy

As difficult as it is to figure out the right stocks to buy, determining when to sell can be even more challenging. In this episode, we look at the important factors to consider when deciding when to sell and develop a systematic sell framework that can be used for both quantitative and traditional investors.

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1/13/2020

Episode 6: The Case Against Value Stocks

Confirmation bias is one of the biggest problems in investing. We all have a set of core beliefs, and we tend to surround ourselves with people who also believe them and focus on information that validates them. That can be dangerous, though, because it can blind you to valid arguments that contradict your own. In this episode, we challenge our belief in value investing and discuss some of the reasons why we could be wrong.

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1/6/2020

Episode 5: The Double Edged Sword of Avoiding Value Traps

Many value stocks are cheap because they deserve to be. Some of them no longer have sustainable businesses, and as a result their current discounted multiple will look really expensive relative to where their business is headed. These types of stocks are often referred to as 'value traps" and value investors do everything they can to avoid them. In this episode, we talk about value traps, why they are impossible to avoid completely, and some rules that can help minimize them.

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12/30/2019

Episode 4: Lessons From the March For the Fallen

In this episode, we discuss Justin's experience participating on the Alpha Architect team in last year's March for the Fallen and how some of the lessons he learned from it can be applied to investing. The March for the Fallen is an event hosted by the Pennsylvania Army National Guard Training Center at Fort Indiantown Gap to honor the memory of all that have fallen in the defense of our nation.

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12/23/2019

Episode 3: Six Common Misconceptions About Factor-Based Strategies

Factor strategies have grown exponentially in the past decade. Almost every major asset manager now offers their variation of things like value, momentum, quality, and low volatility. But to use them properly, it is important to understand what they can and can't do. In this week's episode, we discuss the common misconceptions about factor strategies and what they can deliver for investors.

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12/16/2019

Episode 2: The Rising Bar for Active Management

The market has always been tough to beat, but the ability to investors to gain inexpensive exposure to factors like value and momentum has made the job of active managers even harder. In this week's episode, we talk about why the pursuit of alpha has become more difficult over time.

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12/9/2019

Episode 1: The Mechanics of Value Investing

There is a tendency to believe that all value investing strategies are similar. But beneath the surface, many value approaches couldn't be any more different. These differences can lead to substantially different outcomes in both the long- and short-term. In this episode, we discuss the many decisions that go into building a value portfolio and how they impact the results it delivers.

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