iShares Russell 2000 Value Index (IWN)
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- Now's the Time to Buy Bank Stocks [view article]
- Short Cut to Profits? A Closer Look at Inverse Funds [view article]
- 36-Month ETF Correlations with Russell 3000 [view article]
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- ETF splits (EEM, IWN, IJR, EFA, IGE, IJK, IJH, IJJ, IWM, ICF, IJS, IYR) [view article]
- What's Wrong with Today's Value Investing? [view article]
- Exchange-Traded Funds and Closed-End Funds by Asset Class, Type and Provider [view article]
- Not All Passively Managed Funds Are Created Equal [view article]
- Confusing Volatility With Risk - A Costly Investment Mistake [view article]
- Top 50 ETFs by Revenue Per Fund [view article]
- Portfolio Manager Favors International Asset Allocation [view article]
- Money Magazine ETF Recommendations: Keeping It Simple May Be Stupid [view article]
loading ...Recent IWN Articles
- Small and Midcap Stocks: Style Shifts in 2008
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- Merrill Lynch's Strategies for a Volatile Small Cap Market
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- What's Wrong with Today's Value Investing?
- Confusing Volatility With Risk - A Costly Investment Mistake
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Gerstein
What's Wrong with Today's Value Investing? [view article]
Dirk,I appreciate your points. Eliminating stocks with less than $250 million market cap leaves us with about 1550 Russell 2000 stocks. I do think it’s more reasonable to compare such a universe with the 2000; I think a $250 million market-cap threshold is too low to make the S&P 500 or Russell 1000 valid bogeys.
Even so, I decided to alter the tests to address the issues you raise.
Interestingly, dropping the market cap test altogether made the screen performance about 100 basis points worse meaning that value investing looks even more in need of repair.
Going back to the $250 million market cap test and comparing the results with the S&P 500 and the Russell 1000, again the value screen fared even worse. This should be no surprise. Remember the S&P 500 Value ETF underperformed the SPYDR.
Reply
What's Wrong with Today's Value Investing? [view article]
I always thought value investing also included a thorough analysis of company fundamentals, management, etc. I don't think a simple quant. filter is really value investing, is it? ReplyWhat's Wrong with Today's Value Investing? [view article]
Why in the world would you use a Russell 2000 benchmark and then eliminate stocks belwo $250 million? The Russell 2000 is a small cap index and what is on your screen, Royal Dutch and BP? Talk about using the wrong benchmark. That aside, combining estimate revisions with value is a very worthwhile strategy. However, you should re run your tests with a more reasonable benchmark, Say the Russell 1000 or the S&P 500, using the Russell 2000 makes about as much sense as using the Mubai Sensex as your bogey. ReplyWhat's Wrong with Today's Value Investing? [view article]
Reading the article, I got the same thought as fxtrader07 - take out the banks and insurance companies and your initial model will probably work again. ReplyGerstein
What's Wrong with Today's Value Investing? [view article]
Thank you for your thoughtful comment. I went back to portfolio123 to check on the approach. Eliminating Financials as a whole helped a bit (matching the Russell 2000), but still didn’t produce the sort of results we’d seen in the past.Note that this, and many other, value approach is based on the profit stream of a going concern, as opposed to a point-in-time snapshot of the asset base. Omission of financials helps now because their earnings trends have turned unfavorable (a manifestation of the bad things happening to the asset bases). I got pretty much the same result when I turned the estimate revision rank upside down: instead pursuing highly-ranked stocks, I omitted low-ranked issues. I still had some financials, but they were the better ones; in this version, eliminating financials didn’t help.
So essentially, we’re back to the notion of looking at stocks the way other investors do, that being the main part of the analysis, and then adding a value layer.
Reply
schutte
What's Wrong with Today's Value Investing? [view article]
Fortunes to be made and fortunes to be lost...It is high time to readjust your savings if you want them to survive the coming hyperinflation. Banks and financials surely are NOT a place to be! ReplyWhat's Wrong with Today's Value Investing? [view article]
can you modify your original screen such as to exclude banking and insurance stocks? that might be all it takes to really fix it. the rationale: banks nowadays are mostly highly leveraghed hedgefund-type institutions with lots of assets and liabilities off-balance sheet that grossly distort the valuation metrics. Similiar for many insurers.would be interesting to see what the result would be? Reply
Exchange-Traded Funds and Closed-End Funds by Asset Class, Type and Provider [view article]
can you please update this list? thanks. ReplyNot All Passively Managed Funds Are Created Equal [view article]
Another issue not mentioned is how well the fund company tracks the index. Compare VWO and EEM which track the same MSCI index. There have been very large differences in quarterly returns, far in excess of the differences in expenses or lending fees.Reply
Confusing Volatility With Risk - A Costly Investment Mistake [view article]
I disagree on Small-Cap Growth versus Small-Cap value. Compare VBR (Value ETF) versus VBK (Growth). VBK outperforms.finance.google.com/fin...;
Reply
Confusing Volatility With Risk - A Costly Investment Mistake [view article]
Good case for small cap value ETF. Hold it and snooze. ReplyTop 50 ETFs by Revenue Per Fund [view article]
Does anybody know where I can find a list of all these lists? JJ ReplyThe Wind
Confusing Volatility With Risk - A Costly Investment Mistake [view article]
I like the small cap value stocks. I have some investments in the stable stocks and funds, but those aren't nearly as much fun. It's the small cap values that make me head to the charts to see how much money I've made today... and grin! ReplyConfusing Volatility With Risk - A Costly Investment Mistake [view article]
With all due respect to Mr. Buffet, small cap value investing is not his main theme. Value is his theme. This is pure French and Fama material aka Dimensional Fund Advisors. ReplyConfusing Volatility With Risk - A Costly Investment Mistake [view article]
Smart money invest WITH Buffet. Reply