starmitt

https://www.bloomberg.com/news/articles/2020-07-21/blackrock-quant-sees-stock-valuation-a-mystery-not-worth-solving

The one thing that bothers me about these tests is the quarterly rebalancing. I believe the original MF called for holding for one year + one day. Without more details on how this was handled, not sure how to interpret the results. Maybe I missed something.

I appreciate that the members are discussing this, and thinking about how discourse could be improved. Here is what I have noticed recently that I would like people to consider. When posters engage in discussions on investing, there is predominantly at least the appearance of an effort to apply critical thought. When posters engage in discussions on politics, there is predominantly the appearance of regurgitating common beliefs. Very shallow. Even at least one thread I saw which revealed a lack of basic knowledge of civic functions/laws/powers. Now it is easy enough for me to simply not click any thread that is non-financial, but here is the issue. People who think sloppily on one topic tend to think sloppily in general, and those who think rigorously tend to do so as a matter of course. So those that think sloppily are diluting investment threads, and those that think rigorously are diluting the poo-throwing political threads. And of course, you who are reading this know you are a rigorous thinker. ;D I think in a recent thread Sanjeev wrote that in the next iteration of this board, politics will be eliminated. I look forward to this. Even for the non-rigorous thinking posters, I suspect there will be a tendency to try to match the level of discourse.

Oh, I can think of one "older" poster who needs to join in, tell his philosophy for the 412th time, along with stating a belief that the wonderful investors will outperform because they are wonderful, their AUM doesn't matter. Then it will be perfect. ;D Back to topic - it is interesting that their outperformance is so pronounced, given their portfolio holdings. 99% of the portfolio in top 12 holdings, only one of which isn't a very large company.

My response is not specific to Abrams. But I would say it is wrong to judge on any subset of results when the full set of results is available. I would further say it is a mistake to not evaluate the environments for subsets (or the full set) of results.

Mikenhe: You are not being an arse, and it is appalling that anybody would suggest that you are. To suggest that there may be negative repercussions for you is fine, but that should be the limit. This may not be an isolated event for your company, and even if it really was the first, it will be a precedent. Further there are no doubt other companies are taking similar actions. So if you choose to report this, there may be a larger effect than simply addressing this event. Steve

When I look at a resource (commodity producing) company, the first thing I look at, even before the story, is how they are financed as an on-going concern. The rate of share dilution can be eye-opening, as can the growth in debt. Then a look at maintenance vs growth capital expenditures. While in the early years negative free cash flow is to be expected, at some stage I expect any company to be able to produce enough return that it can finance its own operations without recourse to capital markets, and even have the option of sharing excess with owners. Applying these up front reduces the amount of digging and analyzing I end up doing, and it helps prevent me from violating Rule #1.

Agreed. When the average daily volume is less than my minimum position size (or even is a few multiples of it) then the advantage of "investing where the big money can't" turns into experiencing the limitations of that big money.

The attached may be of interest. AAII_screens_performance.pdf

WMW is an ETN. Morningstar reconstitute the underlying index quarterly.