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John Reese

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  • Be Imperfect When You Pick Stocks [View article]
    Good point, and that's a good example of why investing in a well diversified portfolio is important when using quant strategies. But I'd also note that Greenblatt once did a study examining how investors who picked and chose between magic formula approved stocks did vs. those who simply invested in all of the strategy's top rated stocks. Those who picked and chose did a lot worse because they missed out on the biggest winners, many of which were the stocks with the biggest apparent problems. Remember that such stocks usually have really bad scenarios baked into their prices -- the market knows about PDLI's issues and expects very little, so the company just has to do a little better than that for shares to do well.
    Aug 27 01:42 PM | Likes Like |Link to Comment
  • The Truth Behind Stock Prices [View article]
    Like Steven Stills said, love the one you're with!
    Aug 12 05:08 PM | Likes Like |Link to Comment
  • The Truth Behind Stock Prices [View article]
    Interesting -- i wasn't familiar with that piece. Thanks for sending -- looking forward to checking it out.
    Aug 12 05:05 PM | Likes Like |Link to Comment
  • The Truth Behind Stock Prices [View article]
    Agreed. If you can find good stocks with durable competitive advantages, you can at least keep up with inflation.

    Great old article from Buffett on how companies can keep up with inflation:
    Aug 12 05:03 PM | Likes Like |Link to Comment
  • The Truth Behind Stock Prices [View article]
    Hi C.J.,

    Thanks so much for reading. So far in 2014, my best performers have been my John Neff-inspired portfolio and my Momentum Investor portfolio, both up 8.2% (through last week). Overall it's been a down year -- on average my 14 portfolios are down 1.9% vs. +4.5% for the S&P. They're coming off a big 2013, though, and since their inception dates (which range from 2003-2005), they're up an average of 10.0% annualized vs an average of 5.9% for the S&P.

    Let me know if you have any other questions.

    Aug 12 04:55 PM | Likes Like |Link to Comment
  • The Truth Behind Stock Prices [View article]
    Hmmm, interesting argument. But I think it's apples and oranges. They're not stripping inflation out of capital gains, per se. They're stripping it out of total returns (capital gains+dividends). The capital gains part is composed of real book value growth, growth in price/book valuation, and inflation.

    Now, inflation is stripped out of book value growth because you're measuring book value today vs book value at a prior point in time. Inflation is a part of the increase. But with dividend yield, I think it's a different story. If they are taking an average annual dividend yield over a certain period, then every annual reading in that set should already include inflation because both the numerator and denominator of dividend yield (dividend payouts and price of the market) are incorporating inflation, no? So don't they cancel each other out, and leave you with a "real" percentage gain?
    Aug 11 04:35 PM | Likes Like |Link to Comment
  • Greenblatt's Magic Formula: Quite Simple, But Far From Easy [View article]
    Strange, I'm not sure why BCR wouldn't be there. The only thing I can think of is that the MF site does include this disclaimer:

    "The universe of stocks in the database may exclude ... stocks that have been identified by LLC (NASDAQ:MFI) as potentially creating conflicts with strategies used by accounts and funds managed by MFI and its affiliates."

    Perhaps that's the case here.
    Jul 21 12:51 PM | Likes Like |Link to Comment
  • Buy What You Know - But Do Your Homework, Too [View article]
    That is a good article -- thanks for recommending, Shila!
    Jul 14 01:18 PM | Likes Like |Link to Comment
  • Buy What You Know - But Do Your Homework, Too [View article]
    Thanks for sharing -- that's a great example of what Lynch was talking about, I think. Glad it worked out for you!
    Jul 9 12:56 PM | Likes Like |Link to Comment
  • Buffett, Piotroski, And An Inflation-Beating Approach [View article]
    Yes, you're correct Paul -- the wording may have been a bit confusing. I meant in one or more of the five ways.
    Jun 24 03:24 PM | Likes Like |Link to Comment
  • Five Retailers That Are Alive And Kicking [View article]
    The internet competition issue is certainly a big one, Doc. To be honest I don't know how it will play out for BBBY -- anyone who says they do know is probably making a number of assumptions that may or may not turn out to be right. So I prefer to look at the financials and fundamentals, and they are indicating that BBBY is holding its own against the competition right now. If that changes at some point, due to internet competition or something else, then I'd have to reevaluate. I just think it's a bit of a crap shoot (for me, at least) to try to predict what will happen, especially given the ever-changing tech world.
    May 13 03:19 PM | Likes Like |Link to Comment
  • For FutureFuel, The Future Is Now [View article]
    Yes, I have no doubt the type of feedstock is critical to a company like FutureFuel. Frankly, I'm not an expert on the subject. My investment approach involves sticking to the numbers and not trying to project macro issues, as I think trying to do so is incredibly difficult, even for experts. Over the long term I've had a lot of success just keying on fundamentals and financials as part of a disciplined systematic approach. Im not saying that things like feedstock aren't important or that some small percentage of investors might not be able to succeed with a more qualitative approach. But for me, a stick-to-the-numbers approach is far more effective, so long as you stay disciplined and appropriately diversified.
    Apr 28 09:36 AM | Likes Like |Link to Comment
  • For FutureFuel, The Future Is Now [View article]
    Good point. I believe there were some extraordinary retroactive tax benefits that the firm received which makes its trailing p/e lower. My models still see it as a buy using the higher p/e, though.
    Apr 28 09:26 AM | 1 Like Like |Link to Comment
  • 5 Stocks - Including Apple - With Moats To Keep The Competitors Out [View article]
    Good points on growth, bgold. But better to buy before capex picks up while valuation is cheap than to buy when growth is popping, no?
    Apr 9 02:12 PM | Likes Like |Link to Comment
  • Why HCI Is Still A Buy After Last Year's Gains (And Last Week's Losses) [View article]
    The talk on HCI's recent decline is focused on its earnings, which surely played a role. But what's interesting is that when it got hit in January, that coincided with its announcement that it was the first Fla. P&C insurer to offer flood insurance. The more recent hit coincided not only with earnings but with new federal flood insurance legislation being passed, which I believe caps what insurers can charge. Is the street just really down on HCI because of flood insurance? I'd welcome everyone's thoughts.
    Mar 10 02:16 PM | Likes Like |Link to Comment