The Truth About Value Investing | Trading Nation | CNBC

Some strategies for finding “value” stocks may be identifying something else entirely. U-Wen Kok of RS Investments discusses with Dominic Chu.

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The Truth About Value Investing | Trading Nation | CNBC

[amolejoshua]

Investing in a Roth IRA can be a good choice since they are funded with after-tax dollars, and your contributions can grow tax-free over time. When you withdraw money from your Roth IRA in retirement, you won’t have to pay tax on it, which will help you keep more of your hard-earned money. I retired with 2 million dollars.

[kirkclements]

value investing is a stepwise process - calculate intrinsic value (most have their own way to do so) - compare intrinsic value to price - purchase if margin of safety and returns over your horizon make sense - value investing will always remain just that - what changes as market valuations move from cheap to over valued are the required margin of safety and the horizon (holding period) - On the lighter side, when being discussed on a show called Trading Nation you should not expect much depth as traders do not have the attention span - 8 minutes of discussion must have seemed like a 4 year course - lol

[jimbean]

At its core, value investing is being able to determine the intrinsic value of a business. When the price is less than the company's intrinsic value, that's a good deal. What she's saying is there's an industry trend where we are conflating accounting measures ( quantitative analysis ) with the measurement intrinsic value. Quantitative analysis of accounting measures help determine the safety of the investment, but they don't necessarily capture what a company's intrinsic value, that's the human touch part where its the job of an analyst who is willing to dig deep and do the research.

[salkryeful]

Better just invest in a simple index fund/ETF that tracks the entire stock market. Growth and value will have years of outperformance that gets canceled by underperformance to equalize to total market performance. And if one wants to try beat the market overall, then maybe a few satellite holdings with "fun" money (money you are fine losing).

[langa]

She makes a good point- every method(Value investing in this case) has its downfall. Can you also give the benefits too, am sure there is always two sides of a coin. Quick question though, does book value plummet in a day?, OK, lets look at a recent example of GE year 2015 to 20 2016 its BV dropped drastically by 20% and yet its share price surged by staggering rate not only for one year but for another 2years until July this year(2017). Wouldn't a value investor who uses matrices, principles and ratios survive the catastrophe by getting out early- How's that? Am I in the ballpark?

[frxk]

Without a doubt, an experienced analyst with a contextual point of view will beat the quant-based investing recommendations any day. There is no denial of that. They go both top-down and bottom-up methods combined with scientific evidence-based qualitative analysis

[HaroonHaider]

Fundamentals are fundamentals. The whole thing here is just manipulation of the concept of value investing and core definitions of fundamentals. While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.

[DatBoiTommyakaTragic]

Don't forget to add $BFI, I feel like the fundamentals and stock itself can see $25-$30 soon. With the DebtIncome Ratio, Etc.

[limitless]

they don't have a clue about the future
nobody can
blind people throwing darts in the darkness

[imdoc]

If the equations do not work, how do these people continue to make lots of money?

[jonastulstrup]

The Life Course app has some great free courses which helped me learn the basics of long-term investing. I can definitely recommend that :)

[rhythmandacoustics]

The paper is simple. Quantitative value investing is dangerous. You need to have a good analysis in order to avoid value traps. That is all. No formula is without faults.

[xtrout]

So what is her return rate? If not over 20% year to year, then perhaps this is kind of self serving to get folks to fund managers.

[LLyrik]

she really didn't bring any insight on how to properly value invest it sounded like she was stumbling more then explaining

[danguee]

"....but, in the end, you need to apply human judgement". Right there you can see the problem: we know that human judgement is widely flawed. Self-drive cars, driven by machine learning are statistically far better and safer than lazy, distracted, misthinking, stupid human drivers. And we know that large majority of actively-managed funds under-perform the market year after year after year.
So, lady, I'm unimpressed by your main

[gilbaz]

Ah .. her 'self-driving car' analogy is so bad! In 3-5 years we will walk into self-driving cars, sleep, wake up, and get out at our destination! (no human driver needed). Miss Dominic Chu, read about it!

[cdaddy]

She's basically saying standard value investing has been manipulated. That's really not news, long time investors know value investing doesn't apply anymore. Blame companies that financially engineer. You can't truly trust the fundamentals of a company. Take Amazon, a company that believes in growth over profits. Their stock goes against how investors traditionally invest yet their stock has been soaring. Strategies don't work forever, standard analysis isn't enough anymore.