Category Archives: Value Investing

Book Review: Berkshire Beyond Buffett

It’s time to change what Warren Buffett supposedly said about his mentors: “I’m 85% Ben Graham, and 15% Phil Fisher.” For those who don’t know, Ben Graham is regarded to be the father of value investing, and Phil Fisher the father of growth investing.  Trouble is, Warren Buffett changed in his career such that this […]

Even with Good Managers, Volatility Matters

This is another episode in my continuing saga on dollar-weighted returns. We eat dollar-weighted returns.  Dollar-weighted returns are the returns investors actually receive in a open-end mutual fund or an ETF, which includes their timing decisions, as opposed to the way that performance statistics are ordinarily stated, which assumes that investors buy-and-hold. In order for […]

Factor Glut

I use factors in my investing. What *are* factors, you ask?  Factors are quantitative variables that have been associated with potential outperformance.  What are some of these factors? Valuation (including yield) Price Momentum (and its opposite in some cases) Insider Trading Industry factors Neglect Low Volatility Quality (gross margins as a fraction of assets) Asset shrinkage […]

Numerator vs Denominator

Every now and then, a piece of good news gets announced, and then something puzzling happens.  Example: the GDP report comes out stronger than expected, and the stock market falls.  People scratch their heads and say, “Huh?” A friend of mine who I haven’t heard from in a while, Howard Simons, astutely would comment something […]