While high StockRank stocks have continued to outperform low StockRank stocks it's been quite a sideways year for the market as a whole. Surely one would presume that it's been a good year for stock pickers?
Sadly the FT shows that 90% of active fund managers have underperformed the indices. We regularly agree with those who question whether market beating funds actually add any alpha at all - perhaps alpha may just be undiscovered beta?
Robeco are fast becoming one of our favourite investment managers - mainly because they publish lots of great material and essentially favour a QVM (quality+value+momentum) rule based approach to stock selection. The best of their 2014 year has been published in this e-book - well worth a browse - they say that equities will be the top performing asset class for the next 5 years.
We've continued our column at Interactive Investor on Screening the Market for winners - this week we covered Piotroski's classic F-Score. It's been a poor year for Piotroski, but given that his strategy has beaten the market in 4 out of 5 years it wouldn't be wise to bet against it outperforming next year. Subscribers can see all our Piotroski screens at the 'guru' page here.
The efficient market hypothesis keeps getting undermined as more and more anomalies appear. Neil Macneale and David Ikenberry believe that you can beat the market by investing in companies that undergo stock splits, as this Wall Street Journal article explains.
Bottom Up
Paul's been back with us this week (although still slightly jetlagged). This week came the revelation that with lower oil prices pulling down the prices of resource stocks, he could be tempted to take a closer look. Frackin' hell, Paul!
Richard Beddard just pointed out thatDewhurst is “startlingly undervalued". After a poor year for its share price it still holds up with a StockRank of 98 that's partly driven by improving broker sentiment. His write-up is highly recommended.
Ed Shing took a look at high ranking resource stockCaledonia Mining as a potential play on a stabilising gold price. He points out that, for a gold mining company (hated sector and a loathed commodity) Caledonia ranks remarkably well for both value and quality.
