Here we highlight an interesting working paper titled "Absolute Strength: Exploring Momentum in Stock Returns" by Gulen and Petkova (2015). The abstract is the following: We document a new pattern ...Continue Reading
A few months ago we highlighted a surprising result: cheap high-quality stocks were getting crushed by expensive junk stocks. The spread at the end of June was around 18%. Here is the chart from th ...Continue Reading
The results in this paper won't surprise most who are regular readers, but the paper below does a nice job explaining things in a simple way. For more advanced asset allocation methods that use moment ...Continue Reading
Unlike equity and bond investing, investing in commodities is a less familiar undertaking for many. Commodities behave differently than stocks and bonds, pose different risks, and can be taxed differe ...Continue Reading
We try to buy the cheapest, highest quality value stocks that everyone hates.
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 It's just that their model-serving as middlemen between investment products and consumers-is inefficient, outdated and just asking to be disrupted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 form 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.