With Q1’19 behind us, we were again reminded why most strategies which trade in and out of the market are nothing more than a Siren call luring a portfolio to crash on the rocks of chasing returns. Much better to be Odysseus and put wax plugs into your ears and focus on the long term to avoid buying high and selling low as volatility trashes your sense of normality. After Q4’18, few people had much appetite for equities, thinking only bad news would prevail in the year ahead. Yet, by the end of Q1’19, US equity markets were up double digits. […more]
Valuation Driven™ Investing begins and ends with calculating the intrinsic value of every stock in a benchmark against which a portfolio is constructed, and comparing those values against traded prices. All of Applied Finance’s portfolios are Intrinsic Value Driven™, which differs significantly from a “value” perspective. To gain a better understanding into Applied Finance’s Intrinsic Value Driven™ approach, let’s first review traditional approaches to “Value”.
The traditional approaches to finding undervalued stocks use a simple ratio such as P/E or P/B, or a mix of them. These common approaches to value come with many shortcomings: […more]
Over the past couple months, worsening macro economic conditions, declining corporate profitability and a bottomless stock market have investors longing for the good old days when the economy delivered steady increases in GDP growth with […more]