Last week I looked at James Montier’s 2006 paper The Little Note That Beats The Market and his view that investors would struggle to implement the Magic Formula strategy for behavioral reasons, a view borne out by Greenblatt’s own research. This is not a criticism of the strategy, which is tractable and implementable, but an observation on how pernicious our [...]
Posts Tagged ‘James Montier’
Joel Greenblatt’s solution to value investors’ behavioral errors
Posted in About, Stocks, Quantitative investment, Behavioral economics, Strategy, tagged Value investing, James Montier, Joel Greenblatt on May 14, 2012 | 2 Comments »
Joel Greenblatt on how and why investors struggle to follow the Magic Formula
Posted in Stocks, tagged James Montier, Joel Greenblatt, Magic Formula, The Little Book That Beats The Market on May 9, 2012 | 9 Comments »
Yesterday I looked at James Montier’s 2006 paper The Little Note That Beats The Market and his view that investors would struggle to implement the Magic Formula strategy for behavioral reasons. The Magic Formula is a logical value strategy, it works in backtest, and, most importantly, it seems to work in practice, as this chart [...]
James Montier on why investors struggle to follow the Magic Formula: Cognitive Biases and Behavioral Errors
Posted in About, Stocks, Behavioral economics, Strategy, Enterprise Value, Enterprise Multiple, tagged James Montier, Joel Greenblatt, Magic Formula, The Little Book That Beats The Market on May 8, 2012 | Leave a Comment »
In his 2006 paper, “The Little Note That Beats the Markets” James Montier backtested the Magic Formula and found that it supported the claim in the “Little Book That Beats The Market” that the Magic Formula does in fact beat the market: The results certainly support the notions put forward in the Little Book. In all [...]
Simoleon Sense interviews James Montier
Posted in About, Net Current Asset Value, Stocks, Value Investment, tagged James Montier, Net Current Asset Value, Net Net Stock, Quantitative investment on March 10, 2010 | 3 Comments »
I’m a huge fan of James Montier’s work on the rationale for a quantitative investment strategy and global Graham net net investing. Miguel Barbosa of Simoleon Sense has a wonderful interview with Montier, covering his views on behavioral investing and value investment. Particularly interesting is Montier’s concept of “seductive details” and the implications for investors: [...]
What Montier’s Painting by Numbers can offer to value investors
Posted in About, Stocks, Value Investment, tagged James Montier, Quant, Quantitative, Value Investment on December 22, 2009 | 13 Comments »
In his 2006 research report Painting By Numbers: An Ode To Quant (via The Hedge Fund Journal) James Montier presents a compelling argument for a quantitative approach to investing. Montier’s thesis is that simple statistical or quantitative models consistently outperform expert judgements. This phenomenon continues even when the experts are provided with the models’ predictions. Montier argues [...]
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