The Stingy News Weekly (06/04/2018)
New from StingyInvestor
Low P/E in the TSX 60
"The low-P/E portfolio would have gained an average of 18.4-per-cent annually over the 16 years through to the end of 2017. It beat the index by a whopping 10.7 percentage points per year on average."
The psychology of money
"In what other field does someone with no education, no relevant experience, no resources, and no connections vastly outperform someone with the best education, the most relevant experiences, the best resources and the best connections? There will never be a story of a Grace Groner performing heart surgery better than a Harvard-trained cardiologist. Or building a faster chip than Apple's engineers. Unthinkable. But these stories happen in investing" [Behaviour]
Lou Simpson wisdom
"One thing a lot of investors do is they cut their flowers and water their weeds. They sell their winners and keep their losers, hoping the losers will come back even. Generally, it's more effective to cut your weeds and water your flowers." [Value Investing]
Market timing with multiples
"This short research note highlights that valuation multiples can be used for market timing, but result in an emotionally challenging strategy. Momentum or volatility-based strategies are attractive alternatives." [Momentum]
Scientists succumb to corruption
"It starts with a dash of temptation. Stir in some rationalization and deception. The final and key ingredient is: stupid systems with perverse incentives." [Behaviour]
Revisiting the Marshmallow Test
"Associations between delay time and measures of behavioral outcomes at age 15 were much smaller and rarely statistically significant." [Behaviour]
Factors from scratch
"The excess returns associated with Value and Momentum result from convergent and divergent processes, respectively. Value stocks are systematically underpriced and gradually converge on their fair value over time. Momentum stocks start out fairly valued or slightly overvalued, and go on to become more overvalued in the short-term, before reverting back. Both styles represent a market mistake that can be captured as alpha." [Value Investing]
S&P/TSX60 Value Screens
DOW 30 Value Screens
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