Tag Archives: Fama and French

What is the Effect of a Label? Smart Beta Makes Bill Sharpe “Sick”

Posted on May 13, 2014 by Ray Galkowski, CFA

Bill Sharpe gave us the Sharpe Ratio to help determine whether an active investment manager is “beating” the market after adjusting for the risk that the manager assumed. Sharpe is from the Efficient Market school of academia, which believes that markets are … Continue reading →

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Jason Zweig’s Intelligent Investor Column on Novy-Marx’s Quality Formula

Posted on March 7, 2013 by Ray Galkowski, CFA

Jason is a favorite columnist of mine in part because of his affinity to Ben Graham and value investing, and in part because he is a great guy. His Saturday column, The Intelligent Investor, named after the Graham book that … Continue reading →

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RIP, Robert A. Haugen

Posted on February 28, 2013 by Ray Galkowski, CFA

Robert A. Haugen passed away Sunday, January 6, 2013 and I did not discover that until now. Haugen is perhaps best known for his book The New Finance in which he summarized important academic studies that proved that markets were … Continue reading →

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Jason Zweig Interviews Jean-Marie Eveillard

Posted on February 24, 2013 by Ray Galkowski, CFA

Jason is correct that many investors who place their capital with value investing firms will not stay with the firm long enough through multiple cycles in order to capture the value premium. Paradoxically, that is part of the reason that … Continue reading →

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Expert Opinion: What is it Worth? Montana, Brady, and Tebow

Posted on November 18, 2011 by Ray Galkowski, CFA

I am absolutely fascinated with the Tim Tebow story. Not the one about the vilified, overtly Christian athlete. No, I am fascinated with the countless stories of athletes like Tebow that experts said could not be successful, and then end up having one success … Continue reading →

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Aswath Damodaran’s Conversion on the Road to Chicago

Posted on March 14, 2011 by Ray Galkowski, CFA

In a recent blogpost, Aswath Damodaran talks about his conversion on the road to Chicago (that is, his acceptance of reality as it is versus his belief in reality as stipulated by Eugene Fama of the University of Chicago). Enjoy: … Continue reading →

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Howard Marks on Risk (in Jason Zweig’s 2/12 Intelligent Investor Column) and Montier on the Risk and Return Characteristics of Value vs. Growth Companies

Posted on February 15, 2011 by Ray Galkowski, CFA

Howard Marks had been writing outstanding letters to his investors for years. I have read almost every one of his letters since and found that they are filled with fantastic investing common sense. Howard Marks has also been delivering great … Continue reading →

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Is Value Investing Riskier than Other Investing Strategies?

Posted on September 10, 2010 by Ray Galkowski, CFA

Efficient Market Hypothesis proponents, like good lawyers, argue that there is absolutely no such thing as a permanent edge in investing and any permanent edge that does exist is riskier than the alternatives. (“Your honor, my client was never in that woman’s apartment and he was only there to return her lost kitten”). I mean, why paint yourself into a corner?

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Are You an Investing Pigeon like Buffett?

Posted on August 12, 2010 by Ray Galkowski, CFA

How Human Behavior may Lead to a Persistent Edge for Value Investors

Many believe that there can be no permanent edge in investing because they believe that market forces will quickly eliminate any edge. That is, many believe that sophisticated investors will bid up prices in investment strategies that tend to outperform and bid down prices in strategies that tend to lag until the edge disappears.

For my first post on this blog, I will write about a persistent investing edge–value investing–and one reason why that edge may never disappear; that reason being human behavior, which rarely changes. We can thank Jason Zweig (Your Money and Your Brain) and James Montier (Behavioural Investing) for bringing to our attention the behavioral experiments described in this post.

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