Hot List Newsletter

Most Recent Hot List Issues

3 most recent issues require subscription. Historical issues can be viewed free of charge.


Validea Hot List

2017 Year in Review

With 2017 coming to a close, it is time to look at what worked for the year, and what didn't. Overall the year was dominated by large-cap technology names, with growth strategies dominating value and large-caps beating small-caps. But those trends don't tell the whole story. Check out our latest issue to see how our guru models performed for the year.


Validea Hot List

Pick a Star or Develop a Process

It's difficult to draw a direct relationship between skill and outcome, especially in investing. Even the best managers will underperform for a period of time during their careers, usually coinciding with buoyant markets, such as we see today. Winners are measured in decades, not months.


Validea Hot List

The Two Most Important Investing Decisions

Investors tend to get bogged down with detailed decisions. But the most important decisions are far more fundamental than that. Get the two most important decisions right, with realistic expectations, and success will follow. Check out our latest issue to find out what they are.


Validea Hot List

The Only Constant in Investing is Change

In investing, there will always be a new flavor of the month and a new fashionable strategy. But investors would be better served developing a plan that makes sense for them and sticking to it over the long run, rather than trying to chase performance.


Validea Hot List

The Dangers of Expecting the Past to Repeat Itself

It's natural to commemorate big anniversaries and look back at historic market events and compare them to where things stand in the present day. Many have been doing exactly that with the 1987 crash recently. But assuming any market will play out exactly like any past market is just setting yourself up for failure. Check out our latest to see how you can best learn from the past.


Validea Hot List

How Human Behavior Affects Investing

University of Chicago professor Richard Thaler has been awarded the Nobel Prize in economics, for, as his friends have said, revolutionizing how economists think about people. Indeed the dismal science isn't just about numbers. It is about how humans react to the economic environment.


Validea Hot List

Why Disciplined Investment Strategies are Best

Imagine a scenario in which you're unsure about directions, so you ask a friend if you could follow him in your car. He happily agrees, then tells you to turn right a mile before he does. In some ways, talk about strategies to protect investors from "black swan" events-negative occurrences that lead to significant market declines--is similarly puzzling.


Validea Hot List

David Dreman and Investor Psychology

Psychologists have begun to recognize and understand the critical role Affect plays in people's decision-making and the manner in which our minds tag representations of objects or events with positive or negative feelings. In order to combat the impact Affect has on your decision-making processes, of course, you have to recognize it. Check out our latest newsletter to see how and how to defend against it.


Validea Hot List

Go Back to School on your Investment Portfolio

Do you have a solid, go-to approach that is aligned with your risk profile and future goals? Are you sticking to that approach no matter what you hear on television or from friends and family? If not, these are questions that deserve your attention. Our latest newsletter gives you some ideas.


Validea Hot List

The Trigger is Not Your Friend

Both professional and individual investors often let emotions get the best of them. A better approach to investing is to arrive at decisions based on concrete metrics that point to strong underlying businesses likely to stand the test of time.


Validea Hot List

Lynch Strategy Not Just Buy What You Know

When Peter Lynch took over as manager of Fidelity's Magellan Fund in 1977, fund holdings totaled approximately $20 million. During his tenure from 1977 to 1990, it generated returns averaging 29.2% per year compared to the S&P 500's 15.8%, making Lynch something of a legend. When he retired in 1990, the fund had grown to $14 billion, a 700-fold increase. But how he did it may surprise many people.


Validea Hot List

Are Small-Caps Small Potatoes?

The small-cap universe doesn't hold the appeal it did in the wake of last year's presidential election, and large-cap growth names have resumed leadership of the market. But valuations and long-term prospects within the group could set it up for strong returns going forward.


Validea Hot List

The Book to Market Model of Joseph Piotroski

A market guru that inspired one of the stock screening models we use at Validea, Joseph Piotroski was a trailblazer in the realm of quantitative investing, although he flew largely under the investing world radar. In 2000 the accounting professor at Stanford University wrote an academic paper that took Wall Street by surprise and was pivotal in the evolution of quantitative investing.


Validea Hot List

Mid Year Portfolio Update

With the second quarter coming to an end, we take a look at what has been working for our guru models in 2017, and what hasn't. With value stocks trailing the market badly so far this year and large-cap growth names leading the way, our best performers have been strategies focused on momentum and models with significant holdings in International stocks.


Validea Hot List

The Investing Strategy of John Neff

While relatively unknown outside Wall Street circles, John Neff earned guru investor status for his enviable track record while managing Vanguard's Windsor Fund. Neff focused on a stock's price-earnings ratio and considered the metric not only as a gauge for how much investors were willing to pay for every dollar of a company's earnings, but also as an indicator of the level of growth investors are expecting from a company in the future.


Validea Hot List

Quant Investing Still Requires Discipline

As big hedge funds continue to corral teams of computer engineers to develop quantitative strategies, the jury is still out as to whether it will pay off. The Validea system, while based largely on quantitative criteria, looks at fundamentals, choosing stocks that meet criteria based on a company's underlying strength and value. These fundamental strategies, while not perfect, are the ones that have the potential to work over time.


Validea Hot List

Ken Fisher and the Price to Sales Ratio

As the second earnings season of the year winds down, we're reminded of how much investors and the media focus on a company's profits and a stock's price-earnings ratio, the ubiquitous share valuation measure. While P/E is indeed a key tool to use when evaluating whether a stock presents a good opportunity, investing guru and author Kenneth Fisher will tell you it definitely isn't the only measure worth considering.


Validea Hot List

Expectations and Storytelling

Humans like to tell stories. But that can be a detriment to long-term performance in the stock market. As an investor, any 'feelings' you may have about a stock will help form expectations regarding the stock's performance. What's important to establish, however, is whether your feelings and expectations are based on hard data or on a narrative you've created.


Validea Hot List

O'Shaughnessy's Warning Against Headline Investing

When it comes to buying stocks, it is essential for investors to value process over outcome, to understand the concrete facts about the stocks that they (or their fund manager) are choosing to purchase and the basis for their appeal. Underlying fundamentals, not headlines, lead to good investing decisions.


Validea Hot List

Good Times and the Contrarian Philosophy

While the Trump honeymoon is losing some of its glow as the nation questions his ability to push through his policy agenda, economic data reflects consumer optimism. This type of landscape, however, sets the stage for a cautionary tale with respect to stock performance. Historically, markets perform best not during times of economic prosperity but rather when the economy is improving despite diminished expectations.


Validea Hot List

How Warren Buffett Looks at Market Valuation

Almost all metrics commonly used by investors make the current market look expensive. But one valuation tool favored by Warren Buffett paints a very different picture and shows the market may actually be cheap relative to other investment options.


Validea Hot List

When Does It Make Sense To Sell a Stock?

For many investors, deciding when to buy a stock can be much easier than deciding when to sell it. But it doesn't have to be that way. Using a disciplined, emotion free approach can make selling a much easier and more successful process.


Validea Hot List

The Truth About Buffett's Technology Buys

One of Warren Buffett's long known rules is that he doesn't buy what he can't understand. And that rule applied to technology stocks for a very long time. But the positions he has taken in Apple and IBM in recent years appear to show a change in his thinking. Check out our latest newsletter to see what that might mean.


Validea Hot List

Why Value Investors Need "Mental Toughness"

Buying low valuation stocks can reap rewards over long periods of time. It is important to understand, however, that buying value stocks doesn't work all the time. Value stocks, as group, can go through lengthy periods of underperformance, and the investor with the mental toughness to stick with the strategy stands the best chance of coming out a winner.


Validea Hot List

Taking a Look at the Meaning of Market Milestones

The Dow hitting 20,000 this week has many investors excited. But do milestones like that actually mean anything with respect to future returns? Read our latest issue to find out.


Validea Hot List

Revisiting the Market's Current Valuation

With the current bull market continuing to run, we take this opportunity to take a step back and take a look at where we stand from a valuation perspective. In this issue, we analyze the market using a variety of valuation metrics including the Shiller PE, Tobin's Q, and Warren Buffett's favorite valuation indicator, market capitalization to GDP. We also look at how President elect Trump's economic policies may impact the market.