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Posts Tagged ‘Contrarian investing’

Greenbackd Contrarian Value Portfolio Update

Posted in About, Behavioral economics, Stocks, Value Investment, tagged on September 16, 2010 | 8 Comments »

In a post in late November last year, Testing the performance of price-to-book value, I set up a hypothetical equally-weighted portfolio of the cheapest price-to-book stocks with a positive P/E ratio discovered using the Google Screener, which I called the “Greenbackd Contrarian Value Portfolio”. The hypothetical portfolio is based on Josef Lakonishok, Andrei Shleifer, and Robert Vishny’s (“LSV”) Two-Dimensional [...]

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5 contrarian candidates for mean reversion

Posted in About, Contrarian investment, Stocks, Value Investment, tagged , on March 9, 2010 | Leave a Comment »

Mean reversion is a favorite investment topic here on Greenbackd (see, for example, my posts on Mean reversion in earnings, Contrarian value investment and Lakonishok, Shleifer, and Vishny’s Contrarian Investment, Extrapolation, and Risk). The premise of contrarianism is mean reversion, which is the idea that stocks that have performed poorly in the past will perform better [...]

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Admiration a contrarian indicator

Posted in About, Contrarian investment, Stocks, tagged on January 29, 2010 | Leave a Comment »

CXO Advisory Group has uncovered a superb paper Stocks of Admired Companies and Spurned Ones by Deniz Anginer and Meir Statman, which finds that the most admired companies on Fortune Magazine’s annual survey of list of “America’s Most Admired Companies” had lower returns, on average, than stocks of spurned companies from April 1983 through December 2007. [...]

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Mean reversion in earnings

Posted in About, Contrarian investment, Stocks, tagged , on January 15, 2010 | 9 Comments »

One of the most fascinating examples of the phenomenon of mean reversion was identified by Werner F.M. DeBondt and Richard H. Thaler in Further Evidence on Investor Overreaction and Stock Market Seasonality. DeBondt and Thaler examined the relative performance of quintiles of stocks on the NYSE and AMEX ranked according to book value. As an adjunct to the [...]

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Contrarian investing or value investing disguised?

Posted in About, Contrarian investment, Stocks, Value Investment, tagged , on January 13, 2010 | 5 Comments »

One of the themes that I want to explore in some depth is “pure” contrarian investing, which is investing relying solely on the phenomenon of reversion to the mean. I’m calling it “pure” contrarian investing to distinguish it from the contrarian investing that is value investing disguised as contrarian investing. The reason for making this distinction [...]

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