|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Stingy News Weekly: 05/23/2021 Stingy Links Value's turn "Value's pain should eventually be rewarded just like it was in the period after 1999, when finally the performance and valuation disparity turned. Fundamentals started mattering and the market began rationally pricing assets. For a 7-year period after 1999, Value went on to trounce Growth by over 14% annually." [Value Investing] Predictability of the value premium "Consider that in December 1994 (shortly after the publication by Gene Fama and Ken French of their seminal paper 'The Cross-section of Expected Stock Returns'), the relative price-to-book ratio of value stocks versus growth stocks was 2.1. Using Vanguard's Value ETF (VTV) and their Growth ETF (VUG), at the end of April 2021 that ratio had widened to 3.2 (52 percent wider), predicting a much larger value premium than Fama-French had found. We see the same pattern when looking at small value and growth stocks. At the end of 1994, the spread was 1.5. Using Vanguard's Small-Cap Value ETF (VBR) and their Small-Cap Growth ETF (VBK), the spread had widened to 2.3 (53 percent wider). Once again, the widening of the spread predicts a larger value premium than Fama-French had found. In other words, in terms of expected returns, the data suggests that the outperformance of value since April 2021 is likely to continue, as Yara, Boons, and Tamoni found that the spread has a strong predictive value two years out." [Value Investing] Economics of customer businesses "Understanding the basic unit of analysis is an essential element of security analysis. An investor should have a point of view on how a company makes money, what opportunities exist, and the role competition might play in shaping the financial outcome. Boiled down to the core, the basic unit of analysis seeks to assess whether a company's investments are likely to earn a return in excess of the cost of capital." [PDF] [Markets] A dark age for bonds "There have been many periods in which real yields have been significantly higher or lower than the historical median. This includes times during which real yields have been negative (16% of the time) and other times when real yield have been above 4% (17% of the time)." [Bonds] Canadian property bubbles "They found Canada's hottest real estate markets are now less affordable than globally influential US cities. Heck, Canada's property bubble even pushed the tiny steel city of Hamilton to become less affordable than Los Angeles or New York City." [Real Estate] The failure of anomaly indicators "One springboard for the You-Xue-Zhang article was a 2016 study by Harvey, Liu and Zhu, who after analyzing 296 anomalies from published papers found that between 80 and 158 (i.e., up to 53%) are likely false discoveries." [Markets] Work in progress "Thanks to the pandemic, most of us have discovered there's plenty of fat in our budget. Think about how much you saved over the past 14 months by not going on vacation, cooking at home and avoiding the shopping mall. During retirement, if your nest egg looks a little depleted, perhaps you should adopt a 'pandemic budget' for six months or a year." [Retirement] Wise words from Lou Simpson "Lou Simpson is largely unknown, even among investors. Yet, he quietly racked up a track record that bested the S&P 500 by 6.8%." [Value Investing] How the virus spreads "There was just one literally tiny problem: 'The physics of it is all wrong,' Marr says. That much seemed obvious to her from everything she knew about how things move through air. Reality is far messier, with particles much larger than 5 microns staying afloat and behaving like aerosols, depending on heat, humidity, and airspeed. 'I'd see the wrong number over and over again, and I just found that disturbing,' she says. The error meant that the medical community had a distorted picture of how people might get sick." [Health] S&P/TSX60 Value Screens
DOW 30 Value Screens
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More... |