In preparation for the upcoming earnings releases for US megacap stocks over the next two weeks, Applied Finance would like to take inventory of the intrinsic value and implied expectations characteristics of the short list […more]
We originally wrote this note in December, 2020, but it serves as a timeless reminder that understanding intrinsic value and wealth creation is critical to successful investing. From the Applied Finance Team – Happy Holidays. […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]
Excess Intrinsic Value Motivation Applied Finance’s Valuation Beta Research Paper studies the unique characteristics of the Intrinsic Value Factor™ in asset pricing. We believe this research is an important contribution to asset pricing literature, not only […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]
Given the impact that these stocks have on cap-weighted benchmarks, we want to continue to review their valuation prospects on a quarterly basis. […more]
Looking into the next couple of quarters, we expect US economic growth to remain strong. Consumers’ balance sheets remain in great shape and more workers will be returning to the labor force. Purchases delayed due to supply constraints or availability issues will likely be pushed to 2022, resulting in more even economic growth rates in 2021 and 2022, rather than showing a big fall off next year as previously expected. […more]
Historically, High momentum stocks have done quite well, with the top quintile outperforming the bottom in many years. In 2020, the High momentum group did significantly well in the early part of the year, while that trend reversed in the second half and into 2021. YTD, we’ve seen the largest reversal in the momentum factor since 2016, with High momentum companies underperforming Low firms by over 15%. […more]
Quantitative investment strategies have intellectually dominated the financial industry for sixty years. In practice, however, fundamental analysis offers crucial advantages. Therefore, it’s time for the two camps to overcome their differences and work together. […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]
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