This morning we got a sad note from a famous former hedge fund manager (a friend of the firm who shall remain nameless): What if the [stock] returns are never positive again? Just a question from a d ...Continue Reading
The prospect of being able to successfully anticipate and predict future market returns is irresistible to practitioners and academics alike, although success has proven elusive. Many have fallen shor ...Continue Reading
Stock market anomalies behave in mysterious ways. Over long periods of time they can provide expected outperformance versus passive indexes, but in the short run they can experience bouts of gut-wrenc ...Continue Reading
We wanted to formally welcome the newest addition to the Alpha Architect team, Adam Tkaczuk, who joins us as Director of Portfolio Services. Adam started off in physics, transitioning his quantitat ...Continue Reading
We try to buy the cheapest, highest quality value stocks that everyone hates.
Value investing is driven in part by behavioral biases—otherwise, why wouldn’t everyone just be Warren Buffett and buy cheap stocks and hold them? They don’t because if you hold concentrated, cheap-stock portfolios, there will be multiple years when you’ll get your face ripped off. You need clients that understand how true active strategies work over the long term.
Small businesses like Alpha Architect are where the rubber meets the road, helping drive our nation's economic recovery and creating jobs. SBA and our resource and lending partners are proud to see these American entrepreneurship success stories.
There's one thing I am on bullish on, and it's taxes. They're going up
Wes Gray (Wharton, 2002) seeks nothing short of bringing down Wall Street. It's not that he hates bankers or hedge funders, per se. It's just that their model-serving as middlemen between investment products and consumers-is inefficient, outdated and just asking to be disrupted
As it turns out, a number of studies point to ways to assess the value of a stock market. Perhaps the most readable of these is from Wesley Gray and Jack Vogel: "Analyzing Valuation Measures: A Performance Horse-Race Over the Past 40 Years" (Drexel University, January 2012)
We're trying to be more user-friendly and honorable than the traditional kind of dog-eat-dog Wall Street company," he says, explaining that his company is geared around investor education and publicly available research. "That's something that comes from being in the military. It's a humbling thing that translates over.
Alpha Architect's experience working with family offices in the dual role of consultant and investment manager has given us the opportunity to see a lot of indecipherable marketing materials and esoteric investment strategies over the years, neither of which appear to be in the best interest of the investor.
In the end, the evidence suggests that the most effective way to value invest is straightforward: Buy the cheapest, highest-quality value stocks.