Posts Tagged: factor investing

ZIRP, And The Factors That Launched 1,000 ETFs

The rise of smart beta–or more broadly, factor investing–has coincided with a 6 year period of zero interest rates. During this period, factors have been particularly ineffective relative to longer term results. Using publicly-available data (Ken French) we can explore the recent results for the most popular stock selection factors and compare them to longer-term periods of…

Another Thing That Worked in the Past That Won’t In the Future

Meb Faber, one of my kindred investing spirits, has a new book out. He asked twitter for book title ideas. One of my favorite twitter cynics (@ianjoblingrox) joked that he should name it “another thing that has worked in the past that won’t in the future: mean reversion is a bitch.” I laughed pretty hard at that one. I…

Creating Unique Investment Strategies

I took a car service home from Newark airport at 1 a.m. this week after a tiring but fun west-coast trip. I’d just met with 15 very impressive teams—advisors, RIAs, etc—to discuss markets and investment strategies. It struck me that it must be very difficult for advisors–who are constantly bombarded by portfolio managers like me…

Is it now smart to be dumb?

Maybe one of the only ways to outsmart a group of really smart people is to hold positions that seem very dumb. The dumbest stocks to hold might be those with the lowest consensus expectations for the future. The best way to find stocks for which the market has very low expectations is to use…

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…

We Are All Factor Investors

Smart beta, indexing, Fama/French, margin of safety, Graham (deep) value, growth, momentum, GARP. Each of these terms represent very different styles of investing, but they all have one thing in common: they are all predicated on the fact that certain factors have, and will continue to, drive stock returns. ·         Smart Beta: fundamental-weighting, low volatility…