The Archive

Read The Field Guide from the beginning.


 

The Active Manager’s Toolkit

There are only so many aspects of the investing process that we can control. Categorizing these elements will serve as an outline for our research. Let’s outline the active management process and try to leave no aspect uncovered. Your comments here—on elements that I’ve missed—would be much appreciated! This outline will be for a portfolio…

The O’Doul’s of Value Investing

Note: Please also read part two which corrects for a few outliers in the below results Traditional index funds are gaining record market share. The weight of each stock in these index funds is determined by its market capitalization. But bigger is not better. Enter fundamental index. These improved indexes weight stocks by variables “smarter” than…

Robo-Advisors, Financial Advice, and Millennials

I had a great time today with Jason Zweig and Beth Hamilton-Keen talking all things millennials, robo-advisors, and investor behavior. We talk alot about the importance of using automation and technology to our advantage, so its fun that the set is completely virtual. Check out the video below:    

O’Doul’s Part 2

I posted the other day about fundamental indexation being the O’Doul’s of value investing, because it is just the first step away from a market cap weighted index and towards a more differentiated value portfolio. I received lots of emails about the post, so figured I would spend more than 20 minutes on the time series…

Knights, Warlord Entrepreneurs, and Innovation

I am invigorated by the amount of innovation that is flowing today, no matter how crazy the associated business valuations may be; there is nothing more exciting than dealing in ideas that may change things for the better—from the individual to the global scale. To keep the momentum and motivation going, we can learn a…

Should You Use Active Managers?

How much of what you do in your life is the result of what others expect of you? I’ve been trying to remove small talk from my life and replace it with what Larry David calls “medium talk.” If you want to try medium talk, I’d steer clear of the above question. I’ve tried it,…

The Original Value Factor: Price-to-Book

Cheaper stocks have outperformed the market – Everyone As I write and think about “factor investing,” I worry about what Aruther Koestler called the “struggle against the deadening cumulative effect of saturation.” Value investing was revolutionary when Graham was writing about it, and was still fairly revolutionary when Fama/French, Lakonishok, and–shameless plug–Jim O’Shaughnessy (among others) were exploring it…

Why Reading Books Is the Best Thing You Can Do

I was asked a fun question the other day: what is your top advice is for new college graduates? On CNBC, several of us answered the question, and my advice was simple: read as many books as possible. If you want to be interesting, interested, successful, and happy, then there is no substitute for reading….

Lessons From A Weekend With Special Forces

I spent the weekend with a U.S. Army Special Forces team. Their captain—my best friend from childhood—was getting married. Many members of the team were Rangers before graduating to Special Forces and had done several tours in the Middle East. The best man—a captain of another Special Forces team and a Ranger school classmate of…

Using the Price-to-Book Ratio

Having explored the history of the price-to-book ratio, we can now turn to its usefulness as a stock selection criterion. The data suggests a few important points about the price-to-book ratio: It has worked quite nicely in small-cap It has not worked as well in large-cap stocks Price-to-book delivers the best returns when it is used…