Finance is in a funny place now. Corporate finance operates under the guidance of the NPV Rule. The NPV Rule provides the following guidance to corporate executives: To the extent a corporation sources investment opportunities […more]
Employing a strategy that is a little different from many of its peers, the value investor secured a mandate from GPIF — the world’s largest pension — in October, following a due diligence process that started that summer. Value has been underperforming since the global financial crisis, but started to come back in 2021. […more]
In October 2020, Applied Finance published a research paper (Valuation Beta) that studied the attributes of a comprehensive intrinsic value framework in the context of asset pricing studies popularized by Fama French’s expansion from the […more]
Forward interest rates and the long-term inflation expectations they contain is the critical rate watched by Federal Reserve policymakers. The Federal Reserve will view itself as “failing” if it cannot help inducing sustained long-term inflation of 2%. […more]
Over the last few quarters, we have monitored the poor valuation characteristics of dilutive stocks. The top 30% Financing Yield stocks have outperformed their bottom 30% peers by 0.8% in the Russell 1000 and 5.4% […more]
Our Co-founder, Rafael Resendes, has been featured by Sarah Max in Barron’s discussing the history behind our flagship Applied Finance Select Fund. Sarah explains why valuation distinguishes the Select Fund from most large value funds and why in the past three years it has performed better than 96% of its peers […more]
“We’re redefining what value is. The term has been tortured and confused with cheapness.” Mr. Resendes says. In our view, growth and value can coexist and regardless of what a price multiple/cheapness indicator might imply, high multiple companies can be undervalued in terms of their overall valuation. […more]
Tesla and Forced Opinions The market can be a cruel arbiter, eventually compelling all to have an opinion, kicking and screaming they might complain, but everyone is forced to place a bet. For much of […more]
Joe Weisenthal and Tracy Alloway from Bloomberg Markets, recently interviewed Rafael Resendes on How Most Value Managers Are Getting It All Wrong. Below are the links to listen to the interview. Link to Podcast on […more]
Jeff Bezos to Quant “value” investors- I’m thinking of expanding $amzn beyond books – should I invest in my business? They all say – No Don’t!!! Our models show companies that invest in their business […more]
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