The "Magic" Behind Greenblatt's Winning Formula
In theory, a winning investment strategy is a bit like a beautiful, secluded tropical island: Don't let too many people know about it, or else it will be ruined. Well, a decade ago, Joel Greenblatt told the world about a highly successful strategy that, until then, had been the equivalent of a beautiful, secluded tropical island. And guess what? Investment "tourists" have yet to ruin it. In this week's newsletter, we take a look at Greenblatt's "Magic Formula", and examine why the strategy -- and the strategies of other investment greats -- continue to work long after academic theories say they should.
Believing In Value
While history has shown that smaller stocks tend to beat their larger peers by a significant margin over the long haul, we've seen a divergence from that trend over the past couple years. So, are value stocks dead? We find that notion very unlikely. That's because we don't think the historical outperformance of value stocks is due to circumstance or coincidence. Value stocks have outperformed because of human nature and the very nature of business itself.
A Look at Martin Zweig's "Super" Market Timing Strategy
In this issue, we look at the timing system developed by the late, great Martin Zweig, one of the gurus upon whom I base my strategies. Zweig developed a number of timing tools that he used to determine how invested he would be in the market at any given time. Included in his "Monetary Model" are factors like the discount rate, the prime rate and installment debt.
A Quant's Journey: The Mental Lessons
After 12 years of running my guru-inspired investment models, I've learned a number of lessons about the mental approach needed to succeed with quantitative strategies. Read this week's newsletter to see what the greatest of those lessons are.
Juggernaut Stock Selection Strategies for the Long-Term
In this week's Validea Hot List, we provide an update on the current Hot List portfolio and also outline the research conducted by James O'Shaughnessy in the various editions of his book, "What Works on Wall Street". The combination of value investing and momentum outlined in the book is a very powerful way to select stocks and we highlight the studies from O'Shaughnessy to support this.
A Quant's Journey - 4 Key Lessons I've Learned Over 10+ Years of Following Systematic Strategies
It has now been more than 12 years since I started running my quantitative guru-inspired investment strategies. Read this week's newsletter to see what the greatest lessons I've learned along the way are. Plus, the Validea Hot List is being rebalanced and four new stocks are being added to the portfolio
Spotlighting One of the Greatest Fund Managers of All-Time: Peter Lynch and His Strategy
In this issue of the Validea Hot List, we highlight Peter Lynch and his exceptional performance track record while at the helm of the Fidelity Magellan Fund. We outline our Lynch-based model and include the top 10 scoring stocks that meet the Growth At A Reasonable Price (GARP) investment criteria based on his book, "One Up on Wall Street". Also, we provide an update on the Validea Hot List portfolio, which has clawed its way back into the black for the year.
How Many Stocks Is Enough? The Long Term Risk & Return Data Behind Our 10 & 20 Stock Portfolios.
In this issue of the Validea Hot List we take a deep look at the pros and cons of running a highly concentrated stock portfolio, and why using a fundamental ranking system, like the Validea investing approach, can help give focused portfolios, such as the Validea Hot List, a strong performance advantage over time. Also, the Validea Hot List portfolio is being rebalanced and a few new names, including the retailer Zumiez, are being added to the buy list.
Spotlighting Benjamin Graham and Great Value Investors
In this issue of the Validea Hot List, we provide an update on the US economy and our performance, and review some recent strong performers in the portfolio. Also included is a highlight on our Ben Graham deep value model and how great value investors use fundamentals, discipline and a long-term investment horizon to give themselves the best chance to beat the market.
The Hidden Downside of Investing in Market Cap Weighted Indices
In this issue, we explore how market-cap weighted indices are constructed and the risks associated with them and why strategies that select stocks based on fundamentals offer a viable long term alternative to disciplined investors. Also, the Validea Hot List portfolio is being rebalanced and we are adding a handful of new names, including a two firms in the insurance sector and two new small cap bank names.
Sticking to the Fundamentals - like that of John Neff and other Gurus - is Key to Long Term Success
The market - and the Hot List - have encountered some turbulence recently. Read this week's newsletter to see how we're handling the bumps in the road. Also included in this issue is an overview of John Neff's investing approach, which includes independent thinking and a fundamental-focus when selecting stocks and the investing for the long run.
Beyond Value -- How Momentum can Peacefully Co-exist with Value Investing
In this issue, we look at various fundamental-based strategies that use a combination of value and momentum factors. Also, the Hot List portfolio, which is having a solid year performance wise, is being rebalanced and four new names are coming into the portfolio, including a small-cap community bank with nice fundamentals.
Buying Selling and Buffett -- How a Systematic Sell Discipline Can Improve Your Returns
How do you know when it's time to sell a stock? In this week's newsletter, we tackle that question by looking at how Validea's Warren Buffett inspired strategy has fared using different buy/sell frequencies - and the results may surprise you. Also included is an overview of the current economic back drop and how the Hot List portfolio is faring so far in 2015.
New Gains and New Names for the Validea Hot List
Still well ahead of the market in 2015, the Hot List is adding three new holdings on today's rebalancing. Also in this issue is a review of the market's overall valuation using the Shiller P/E, Tobin's Q, the market's Price-to-Sales ratio, and other metrics.
A Look at David Dreman's Contrarian Philosophy and Investment Approach
In this issue we look at David Dreman's investment philosophy and approach as outlined in his timeless book, "Contrarian Investment Strategies". Also, in this issue you'll find an update on the Validea The Hot List portfolio, which has been flying high in 2015. Find out which holdings have been driving the portfolio's recent performance in this week's newsletter.
The Rate Hikes Are Coming, The Rate Hikes Are Coming! (Some Day. Honest )
A historical look at the impact of rising interest rates on the stock market. Also, the Hot List continues its strong performance this year and four new stocks are coming into the portfolio, including an energy name, a semi-conductor company and a beaten down flooring firm that looks troubled, but could be a great long-term opportunity.
A Closer Look Joel Greenblatt's Magic Formula Value Investing Model and Its Top 10 Ideas Right Now
Amid mixed economic data, the Hot List has been trying to build on its strong 2015 performance. Read this week's newsletter to see which of its holdings are leading the way. Plus, Greenblatt's Magic Formula model is discussed and this issue features the top ten scoring value stock ideas that score highest according to the model.
Battling Your Investment Biases and Improving Your Long-Term Returns
The Hot List is continuing to have a strong year, but it is always important to have a plan for when times get tough. Read this week's newsletter to see how the portfolio is designed to eliminate the behavioral biases that can wreak havoc during market turmoil. Also, the Hot List is rebalanced today and there are four new positions, mostly in the small-cap arena, being introduced to the portfolio.
Markets Working Through the Adjustment Period
The broader stock market's gains have been tepid as the economy adjusts to a low-oil-price world, but the Hot List remains well ahead of its benchmark in 2015. Read this week's newsletter to see which holdings are leading the way. Plus, the Ken Fisher Super Stock model is in the Guru Spotlight this week.
The Case For Guru Strategies -- How and Why these Investment Models Still Work in Today's Market
The stock market and economy have gone through many changes over the past few decades. Read this week's newsletter to find out why old strategies still work in the new financial world. Plus, the Hot List portfolio, which is having an excellent year so far in 2015, is undergoing its monthly re-balancing and two new fundamentally sound stocks are being added to the portfolio today.
10 Slow Growing, High-Dividend Lynch-Based Model Picks
In this issue of the Validea Hot List, we highlight another way to utilize our stock screening models by providing a sampling of stocks that pass the Lynch based model, have dividend yields of at least 3.5%, and have five year annualized growth rates under 10%. The Hot List portfolio is also in the spotlight given the very good performance so far in 2015 and over the long-term.
Investing Lessons from The Oracle of Omaha's Annual Letter to Shareholders
Warren Buffett recently released his annual letter to shareholders. Read this week's newsletter to see what lessons investors can take from Buffetts latest missive. Plus, the Validea Hot List is rebalanced and we have four new stocks coming into the portfolio.
Quantitative Value and Growth Guru Strategies On The Rebound
The Hot List is continuing its strong bounce-back in 2015. See which holdings are leading the way in this week's newsletter. Also, we highlight the Martin Zweig growth investor model, which is based on Zweig's book Winning on Wall Street. During the 15 years that it was monitored, Zweig's stock recommendation newsletter returned an average of 15.9 percent per year, during which time it was ranked number one based on risk-adjusted returns by Hulbert Financial Digest.
Looking at the Markets Valuation Using Multiple Fundamental Factors
In this issue of the Validea Hot List, the market's valuation is looked at using a number of factors, including the P/E, P/S, Shiller P/E, Stock Market/GDP ratio and Q Ratio. Also, after a strong start to 2015 the Hot List Portfolio is adding five new holdings, including one of the biggest names in the market that is favored by the Peter Lynch and Warren Buffett factor based models.
Hot List Portfolio Bouncing Back in Early 2015
A month into the new year, the Hot List is bouncing back strong from a disappointing 2014. See which holdings are leading the way in this week's newsletter. Also included are other strong performing model portfolios. Our Consumer Non Cyclical Portfolio is highlighted as well as the strategy based on James O Shaughnessy's long-term research and studies.
Reasons to Stay Optimistic in 2015 and over the Long-Term
As 2015 begins, there are a number of reasons to be optimistic about how our guru inspired portfolios are positioned. Read this week's newsletter to find out what those reasons are. Plus, the Hot List portfolio is having its first rebalancing of the year and three fundamentally sound stocks are being added to the portfolio today.
U.S. Economy And Markets Finish 2014 On A High Note
The U.S. economy ended 2014 on a high note. Read this week's newsletter to see how the Hot Lists holdings are faring amid the economic improvement. Plus, the Peter Lynch investing model is featured along with 10 top stock ideas according to the Lynch inspired strategy.