My Advice

Markets

· The markets are remarkably efficient. You can learn this lesson from me, or the markets may teach you, but be prepared for an expensive tuition bill that comes with that knowledge.

Effciency of the market

· Embracing the efficiency of the markets embodies a “never-have-to-say-you are-sorry” philosophy towards investing, which can be pretty liberating.

The Future is a Mystery

· The future remains a mystery, and no one has a crystal ball. Hence, we should heed the wisdom of the Nobel Laureates, individuals I've had the privilege of knowing and respecting.

Never having to say your sorry.

· Embracing the efficiency of the markets embodies a “never-have-to-say-you are-sorry” philosophy towards investing, which can be quite liberating.

Provider of Capital

· As a provider of capital, you have every right to expect the market return commensurate with the risk you undertake. This mindset allows everyone to thrive under the principles of capitalism, as there’s a positive expected return on capital for all participants.

Listen to Nobel Laureates.

The future is uncertain, and no one possesses a crystal ball. Therefore, we should listen to the wisdom of Nobel Laureates, whom I have had the privilege of knowing and respecting.

About Us

Our Evidence-Based approach to investing draws on more than 90 years of data and research as well as the work of noted academics and economists.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

Profitability

A June 2012 study authored by University of Rochester professor Robert Novy-Marx, “The Other Side of

Marx, “The Other Side of Value: The Gross Profitability Premium,” not only provided investors with new insights into the cross-section of stock returns but also led to the development of new factor models that incorporate a profitability factor.

Novy Marx's Findings

Before unpacking a more recent paper with new insights into how accruals and cash flows can impact profitability, I think it’s important to summarize some of Novy Marx's more fundamental findings on this premium:

• Profitability, as measured by gross profits-to-assets, has roughly the same power as the book-to-market ratio (a value measure) in predicting the cross-section of average returns.

• Surprisingly, profitable firms generate significantly higher returns than unprofitable firms, despite having significantly higher valuation ratios (for instance, higher price-to-book ratios).

• Profitable firms tend to be growth firms—they expand comparatively quickly. Gross profitability is a powerful predictor of future growth as well as earnings, free cash flow, and payouts.

Find out more

We draw upon research firmly rooted in credible evidence.

Video

My Advice

Markets

Effciency of the market

The Future is a Mystery

Never having to say your sorry.

Provider of Capital

Listen to Nobel Laureates.

About Us

Nobel Laureates have help put Investment Science on your side!

About Us

Our Evidence-Based approach to investing draws on more than 90 years of data and research as well as the work of noted academics and economists.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

Livestream

Profitability

A June 2012 study authored by University of Rochester professor Robert Novy-Marx, “The Other Side of

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We draw upon research firmly rooted in credible evidence.

Video

My Advice

Markets

Effciency of the market

The Future is a Mystery

Never having to say your sorry.

Provider of Capital

Listen to Nobel Laureates.

About Us

Nobel Laureates have help put Investment Science on your side!

About Us

Our Evidence-Based approach to investing draws on more than 90 years of data and research as well as the work of noted academics and economists.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

We use Evidence-Based Investment Theories. Numerous groundbreaking developments in finance have emerged from the academic world, and we actively embrace their innovative ideas to enhance our practices.

Livestream

Profitability

A June 2012 study authored by University of Rochester professor Robert Novy-Marx, “The Other Side of

Subscribe

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