Value investment strategies make investors wiser like water with core fundamental factor analysis.

Jacob Miramar

2018-04-17 12:38:00 Tue ET

Value investment strategies make investors wiser like water with core fundamental factor analysis. Value investors tend to buy stocks below their intrinsic book values and then wait for them to rebound to fair market values. This old-school investment philosophy echoes the *buy-low-sell-high* mantra of dynamic asset management. Nonetheless, the Russell 1000 Value index now trails the Russell Growth index by 130% in the 9.5-year bull market from late-2008 to mid-2018. Also, the former lags the S%P 500 market benchmark by more than 50%. Stock market valuation blows most conventional benchmarks, and the recent mega-cap tech juggernauts drive most of this outperformance. These tech titans include Facebook, Apple, Microsoft, Google, Amazon, Netflix, and Twitter (FAMGANT).

Some recent quantitative value investment strategies have quietly transformed into smart-beta factor strategies. The latter entail attributing the broad variation in total returns to several fundamental factors such as size, value, momentum, profitability, asset growth, and market risk exposure.

Subtracting multi-beta risk premiums from total returns yields alpha estimates or average excess returns after the econometrician controls for multiple fundamental factors in the smart-beta value investment strategies. On this basis of fundamental risk adjustment, value stocks earn higher *alphas* or average excess returns than their glamor counterparts.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America.

Laura Hermes

2023-05-21 12:26:00 Sunday ET

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America.

Amy Chua and Jed Rubenfeld suggest that relatively successful ethnic groups exhibit common cultural traits in America. Amy Chua and Jed Rubenfeld (2015)

+See More

Admitting China to the WTO seems ineffective in imparting economic freedom and democracy to the communist regime.

Dan Rochefort

2018-07-27 10:35:00 Friday ET

Admitting China to the WTO seems ineffective in imparting economic freedom and democracy to the communist regime.

Admitting China to the World Trade Organization (WTO) and other international activities seems ineffective in imparting economic freedom and democracy to th

+See More

The global cloud expands what can be made digitally viable from electric vehicles (EV) and virtual reality (VR) headsets to artificial intelligence (AI) and the metaverse.

Chanel Holden

2025-04-30 08:27:00 Wednesday ET

The global cloud expands what can be made digitally viable from electric vehicles (EV) and virtual reality (VR) headsets to artificial intelligence (AI) and the metaverse.

The multiple layers of the world cloud Internet help expand what can be made digitally viable from electric vehicles (EV) and virtual reality (VR) headsets

+See More

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.

Chanel Holden

2019-11-19 09:33:00 Tuesday ET

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth. Despite a sharp slowdown in U.S. services and utilities

+See More

Most agile lean enterprises often choose to cut costs strategically to make their respective business models fit for growth.

Daphne Basel

2020-10-27 07:43:00 Tuesday ET

Most agile lean enterprises often choose to cut costs strategically to make their respective business models fit for growth.

Most agile lean enterprises often choose to cut costs strategically to make their respective business models fit for growth. Vinay Couto, John Plansky,

+See More

Stock Synopsis: Top China Internet companies continue to enjoy global reach, business model monetization, and new improvements in sales and profits.

Dan Rochefort

2024-10-27 07:56:01 Sunday ET

Stock Synopsis: Top China Internet companies continue to enjoy global reach, business model monetization, and new improvements in sales and profits.

Stock Synopsis: China Internet tech titans continue to grow amid greater competition. We launch our unique coverage of top 25 China Internet stocks. In t

+See More