This is a summary of links featured on Quantocracy on Friday, 02/26/2016. To see our most recent links, visit the Quant Mashup. Read on readers!
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Ranking Global Stock Markets On Valuation [Meb Faber]A question When an overvalued security continues rising in price, does that mean the valuation indicator is broken? If you listen to many investors, the answer would be yes. An oft-repeated phrase I hear goes something like: ABC valuation indicator has been flashing expensive since XX/XX date. But the stock has gone up 900%! Therefore, ABC value indicator is broken. Is that
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How Can Smart Beta Go Horribly Wrong? [Research Affiliates]Key Points 1. Factor returns, net of changes in valuation levels, are much lower than recent performance suggests. 2. Value-add can be structural, and thus reliably repeatable, or situationala product of rising valuationslikely neither sustainable nor repeatable. 3. Many investors are performance chasers who in pushing prices higher create valuation levels that inflate past performance,
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Volatility Threatens Discipline [Larry Swedroe]This is my fourth article in a series devoted to helping investors stay disciplined in the face of market volatilityand even lengthy periods of underperformance by risky assets. The first was a December 2015 post dealing with what I call investment depression. The second was a January post designed to help investors deal with the worst-ever five opening trading days to a year for the