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The 6 General Principles Of Value Investing

The 6 General Principles Of Value Investing

First published at ValueWalk.com What are the fundamental principles of value investing and how should you interpret them? Joseph Calandro, Jr., a Managing Director of a global consulting firm, Fellow of the Gabelli Center for Global Security Analysis at Fordham University, author of Applied Value Investing, and a Contributing Editor of Strategy & Leadership, published a paper earlier this year that seeks to answer this question. I should say now that this is only a brief summary of the paper…

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Low Rates Are Not Good For Equity Returns

Low Rates Are Not Good For Equity Returns

With the US economy showing signs of life, the Federal Reserve is widely expected to raise interest rates during 2015 for the first time since the financial crisis. And the market seems to be terrified by the prospect of higher rates. The Fed’s easy money policies have propelled the market higher for much of the past six years, and investors are concerned that if the market loses this support, a correction will follow soon after. However, there’s plenty of evidence…

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Societe Generale Developed And Emerging Market Deep Value Screen

Societe Generale Developed And Emerging Market Deep Value Screen

Société Générale publishes a monthly update on the performance of several value orientated fundamental trading strategies across both developed and emerging markets. For deep value investors, one of the most interesting screens is the Graham & Rea deep value screen. The screen is a strategy developed by Benjamin Graham and James Rea. It uses a set of ten basic investment criteria used to identify deep-value opportunities. These criteria are also known as Graham’s last will, and the Benjamin Graham deep…

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Finding Value With The Piotroski F-Score Part 2

Finding Value With The Piotroski F-Score Part 2

**This article first appeared on Seeking Alpha and was published on 06/02/2015. This is the second in a series of articles looking at the investment performance of the Piotroski F-Score over the space of year. You can find the first part of this series, which explains the methodology behind the F-score, as well as an initial summary for each company, here. Finding value The F-Score was designed to hunt out value opportunities that are profit-making, have improving margins, don’t employ…

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Actively Managed Funds Consistently Outperform Trackers

Actively Managed Funds Consistently Outperform Trackers

According to research conducted by FE Trustnet, the average active UK growth fund has beaten an average, standard tracer fund over a period of one, three five and ten years. To say that this is astonishing is an understatement. Many market commenters have been reiterating the benefits of passive of active for some time now, and even market oracle, Warren Buffett has bet against actively managed hedge funds, making a $1 million bet with hedge-fund manager Protégé Partners that a…

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Corporate Cash Reaches a Record High.

Corporate Cash Reaches a Record High.

We live in a period of all-time highs. NYSE margin debt is at an all-time high, US debt is at an all-time high and the S&P 500 and DOW are at all-time highs.  However, interest rates remain at all-time lows. So then, it is surprising to find out that cash & short-term investments on the balance sheets of S&P 500 companies, excluding financials, have reached a level not seen before.  Indeed, according to data from Factset the S&P 500 cash…

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Earnings Growth Compared To Market Returns

Earnings Growth Compared To Market Returns

In theory, the S&P 500 should rise in line with earnings. In practice  this does not happen. While this comes as no surprise, the scale of the difference is astounding. Period Earnings Growth S&P 500 Returns 2003-2013 148% 68% 1993-2003 16% 137% 1983-1993 5% 179% Across three decades the date shows that the S&P 500 has almost no correlation to earnings growth. The current period, 2003 to 2013 has seen the fastest earnings growth but the slowest S&P 500 growth….

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Derivatives Market Reaches New High

Derivatives Market Reaches New High

A combination of fractional reserve banking, bank leverage, money printing, derivative manufacturing and government borrowing has been the reason behind much of the global GDP growth over the past 40 years. This market is now worth a staggering $1 + quadrillion,  that’s $1,000,000,000,000,000 of essentially worthless derivatives where buyers only need to put up a fraction of the purchase price. Add in $250 trillion of government debt around the world and things start to look pretty shaky. During 2012, the…

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Margin Debt Hits an All-time High

Margin Debt Hits an All-time High

Margin debt, or the amount that has been borrowed by investors from banks or brokers in order to pay for US securities, reached a grand total of $379.5 billion in March – the second highest in history. The highest level was $381.4 billion back in July 2007 . The problem is that large amounts of borrowing, on average about 50% of the equity position can exacerbate losses as the market starts to fall as investors rapidly sell down positions. In…

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