While investors have long enjoyed the growth in U.S. equities (usually the largest allocation in their overall portfolio!), regional leadership is a cyclical pattern. At some point, it is very likely the U.S. will no longer be the highest-performing market globally. Huh?1 Sure, the U.S. equity market has risen 293% since its credit crisis bottom in March 2009 — versus Developed International and Emerging Markets “mere” rise of 150% and 154%, respectively. Well, this 2Q17 International ADR2 (IADR) edition of the Factor Alpha Newsletter, dispassionately, sans headlines and other noise, compares our built-in-house multi-factor themes to the MSCI ACWI ex U.S.3
Here’s what we found:
- The public real estate market is uniquely inefficient and a fertile ground for active, factor-based investing.
- Real estate is a diversifying asset class with many benefits, but most investors are under-allocated.
- Public REITs offer complementary exposure while avoiding the drawbacks and barriers to entry of private real estate, but with lower fees and no loss of performance.
“Is there a point where index funds theoretically can’t work a course?” asked Charlie Munger at this year’s Daily Journal Corporation Annual Meeting.1 “If everybody bought nothing but index funds, the whole world wouldn’t work as people expect.”
So to help animate Munger’s premonition in real-time (see the cheery motion graphics below), our Team’s Developer / Performance Analyst)2 rolled up his coding sleeves and hacked into our “Factor Style Grid”. Continue reading “Visualizing Factors & Themes — What You See is What You Get”
Need a digital detox this Summer? These books require no cords, batteries. If it’s dark out, you just need a candle. Here’s a random bunch of good reads that have nothing to do with investing, markets, biz, money. Buying the print versions lets you banish gadgetry altogether.
— Patrick Continue reading “11 Non-Money-Related Summer Reads”
Guest Jim O’Shaughnessy, OSAM’s CIO/CEO, and Carol Massar1 find much to discuss during his periodic visit to her daily Bloomberg Markets radio program. For more research on this topic, go to the microcap archives.
The interview2 begins 2 minutes into the recording…
“Bloomberg Markets: O’Shaughnessy on Investing in Micro-Caps” transcript: Continue reading “Discovering Under-Covered Microcap Stocks
on Bloomberg Markets”
BACKGROUND: We invest deeply in our in-house research, trading, and technology platforms and 100% of the research feeding our investment process is conducted internally. In most cases, our exhaustive study of fundamental investment characteristics leads us to redefine industry-standard metrics at the most granular level in order to boost the accuracy and strength of the signal. We’re fortunate to have a core team of Researchers & Technologists who all share a passion for, and background in, factor-based investing (visit our Blog archives for more background). As a result, OSAM is a living, breathing, evolving, team-based research project. This Guide is an overview of our findings. Continue reading “OSAM Guide to Factor AlphaSM“
In this interview,1 the first part discusses Will’s 8-year research project studying CEOs who were master capital allocators, which is the basis for his book The Outsiders: Eight Unconventional CEOs and their Radically Rational Blueprint for Success.2 The second part of the interview discusses Will’s career in private equity.
Before acting on any of the ideas or advice contained on this recording, please read this important disclaimer.
Topics covered include: Continue reading “Podcast Replay: Will Thorndike
“How Skilled Capital Allocators Compound Capital””
As we head into the long weekend, and Summer, it’s probably — no, definitely — a very good idea to reset and read something non-financial. I made this list mindful of weary investors’ wandering minds (redundant) and want to get this posted in time for you to go get ’em @ your favorite bookstore1 before your flight, drive; or maybe you’re just staycationing. In my humble opinion, here are some of the best books on the subject of creativity: Continue reading “Book Marks:
6 Ways to Take the Market off Your Mind”
To be sure, things are a little bit hectic here in the U.S. — headlines, rants, and Tweets still manage to shock the markets and year-to-date has been rough. So why not avert our gaze North of the border for a change…
Any good news up there? Wrong question.Getting tips from a newsfeed is risky. Continue reading “2017 Factor Alpha Newsletter
Generating income in client portfolios has always been tough.1 And — prospects for rising rates notwithstanding — it will likely be a challenge for years to come. Ehren Stanhope, CFA (OSAM Principal and Client Portfolio Manager) shares his expertise in global dividend-paying stocks, following up on his Dec-2016 post. Continue reading “Webinar Replay:
5 Considerations for Equity Income Investors”