Comments on: Tweedy Browne updates What Has Worked In Investing

By: Enterprise Multiple is the Best Valuation Metric | ValueWalk

Enterprise Multiple is the Best Valuation Metric | ValueWalk — Tue, 01 May 2012 01:46:49 +0000

[...] because that was what all the early research seemed to say (See, for example, Roger Ibbotson’s “Decile Portfolios of the New York Stock Exchange, 1967 – 1984,” Werner F.M. DeBondt and Richard H. Thaler’s “Further Evidence on Investor Overreaction and [...]

By: Which price ratio best identifies value stocks? « Greenbackd

Which price ratio best identifies value stocks? « Greenbackd — Mon, 30 Apr 2012 16:00:52 +0000

[...] that was what all the early research seemed to say (See, for example, Roger Ibbotson’s “Decile Portfolios of the New York Stock Exchange, 1967 – 1984,” Werner F.M. DeBondt and Richard H. Thaler’s “Further Evidence on Investor Overreaction [...]

By: Why Tweedy Browne is one of the coolest mutual fund companies in the world » Andrew Hallam

Tue, 04 Oct 2011 02:45:07 +0000

[...] #split {}#single {}#splitalign {margin-left: auto; margin-right: auto;}#singlealign {margin-left: auto; margin-right: auto;}.linkboxtext {line-height: 1.4em;}.linkboxcontainer {padding: 7px 7px 7px 7px;background-color:#eeeeee;border-color:#000000;border-width:0px; border-style:solid;}.linkboxdisplay {padding: 7px 7px 7px 7px;}.linkboxdisplay td {text-align: center;}.linkboxdisplay a:link {text-decoration: none;}.linkboxdisplay a:hover {text-decoration: underline;} function opensingledropdown() { document.getElementById('singletablelinks').style.display = ''; document.getElementById('singlemouse').style.display = 'none'; } function closesingledropdown() { document.getElementById('singletablelinks').style.display = 'none'; document.getElementById('singlemouse').style.display = ''; } Can Anyone Find Index-Beating Mutual Funds? Maybe!Tweedy Browne Q2 CommentaryMy MoneyModel Indexed Account – How Are We Doing?Model Indexed Account – How Are We Doing?Tweedy Browne updates What Has Worked In Investing [...]

By: The Small Cap Paradox: A problem with LSV’s Contrarian Investment, Extrapolation, and Risk in practice « Greenbackd

Wed, 27 Oct 2010 04:01:28 +0000

[...] value stocks in deciles (an approach possibly suggested by Roger Ibbotson’s study Decile Portfolios of the New York Stock Exchange, 1967 – 1984). They found that low price-to-book value stocks out perform, and in rank order (the cheapest [...]

By: Richard H. Thaler on Overconfidence in Forecasting « Greenbackd

Richard H. Thaler on Overconfidence in Forecasting « Greenbackd — Mon, 23 Aug 2010 04:01:55 +0000

[...] Richard H. Thaler, Chicago School economist and co-author (along with Werner F.M. DeBondt) of Further Evidence on Investor Overreaction and Stock Market Seasonality, and the “Thaler” in Fuller & Thaler Asset Management, has written an opinion piece for [...]

By: greenbackd

greenbackd — Wed, 21 Apr 2010 23:48:43 +0000

Yes, cyclical industry factors are one cause of mean reversion. The others include business specific factors (for example, a new CEO in a poorly performing company) and industry / business / product life cycle factors.

By: Chris Bourque

Chris Bourque — Wed, 21 Apr 2010 19:40:16 +0000

Have you considered that the majority of companies are in some kind of cyclical business – whether it be mining, manufacturing, oil, aircraft, semiconductors, cars, insurance, or banking?

What you call mean reversion I call the up cycle.

Mean reversion in earnings is natural in these industries because a strong period attracts competitors, increasing costs and driving overall industry profits down. Lots of the companies are projecting high rates of growth forever and that is unsustainable.

When the industry does go into a downturn the companies with staying power survive and the highly leveraged firms go bankrupt. The case for each industry is slightly different but in the end the result is the same: the companies that remained in the industry become stronger. This causes their earnings to grow a lot faster.

The theory shouldn’t be called “mean reversion.” In essence the results are the same but it should be quite obvious when you state it as “cyclical companies in downturns will turn up and cyclical companies in upturns will eventually turn down.”

I believe the result is less pronounced for the “upturn companies” in these results because more companies that are given premium valuations are given them because they are less cyclical.

By: ROIC and reversion to the mean: Part 1 « Greenbackd

ROIC and reversion to the mean: Part 1 « Greenbackd — Wed, 21 Apr 2010 04:01:43 +0000

[...] the earnings of high price-to-book value stocks. I usually cite this table from the Tweedy Browne What works in investing [...]

By: John

John — Fri, 12 Mar 2010 00:07:02 +0000

Fantastic stuff!!

Appreciated

I recommend sifting through the 60 odd pages in the tweedy report…

I’d love to see an updated report in 5 years time using the same criteria… Given the recent volatility I think abnormal returns would be far higher with a this new dataset… Someone want to give it a crack??

By: Back-testing the performance of net current asset value against net net working value « Greenbackd

Thu, 18 Feb 2010 05:02:11 +0000

[...] study on the performance of NNWC stocks, perhaps with holding periods in line with Oppenheimer’s Ben Graham’s Net Current Asset Values: A Performance Update for comparison. You can see Jae Jun’s Old School Value NNWC NCAV Screen here (it’s [...]