Bruce Greenwald, Robert Heilbrunn Professor of Finance and Asset Management, Director of the Heilbrunn Center for Graham and Dodd Investing at Columbia Business School, and author of the excellent Value Investing: From Graham to Buffett and Beyond delivered a presentation to the 12th International Post Keynesian Conference Wednesday September 24, 2014. He had some interesting comments on deep value investing cued up at 17.30 below:
h/t John at Shadowstock.
Buy Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations (hardcover or Kindle, 240 pages, Wiley Finance) from Wiley Finance, Amazon, or Barnes and Noble.
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Thank you for providing this excellent blog.
Would applying a Piotroski F-score to a screen of deep value stocks improve performance? I haven’t seen this mentioned in your Deep Value book or your papers. The AAII (American Association of Individual Investors) has a Piotroski screen indicating excellent long-term performance,
http://www.aaii.com/stock-screens?a=menubarHome&adv=yes
Select teh Inception or 10 year tabs.
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It’s interesting to hear him say that 2/3rds of those stocks go bankrupt. Net nets, according to James Montier, have a 5% bankruptcy rate probably due to the fact that net nets are conservatively financed almost by definition.
If it’s really the case that 2/3rds of the cheapest price to book stocks go under then screening out those bankruptcy candidates by simply insisting on a tiny debt to equity ratio would have a powerful effect on your portfolio. Rather than 3-6% outperformance, you could be looking at 13-16% outperformance. This explains what I mean in a little more detail:
http://www.netnethunter.com/16-benjamin-graham-rules/
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[…] presentation from the Welcome Event for the 12th International Post Keynesian Conference. Thanks to Tobias Carlisle for pointing me to the presentation. More details on the conference are available at […]
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All I heard of Bruce is yelling: yada yada. What is his return or performance compare to Buffett? enuff said.
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