A monthly, deep dive, and rigorous piece identifying:
Extraordinary Value Spreads, Mispriced Quality, and Behavioral Errors

Executive Summary Introduction: In May 2014 we published the white papers “Bubble Trouble? Comparing the Current Markets to 1999 and 2007” and “Comparing the Small & Mid Cap Valuation Tails: Low Dispersion, Reduced Opportunities & Fundamental Fixes.” In that ...

Executive Summary Introduction: We believe it is fitting for us to focus on our commitment to adding value to clients’ processes in a manner that respects your time. While the number of ways we have seen clients use our ...

We would like to start with a pre-emptive apology for being terribly boring folks who tend to be grounded in probabilities. That predisposition has made the current environment somewhat challenging for us as we contemplate enigmas such as negative ...

Executive Summary Introduction: As a client of our work we know you are an active manager and hence familiar with the barrage of news stories that seem to revel in our industry’s pain. In fact, just this last Monday ...

Executive Summary Introduction: Clients have asked us about media and sell-side reports that claim near-record levels of U.S. corporate borrowing are being used to fund significant net stock repurchases in the US. Some observers worry this may be reminiscent ...

Conclusions on the Quick Conclusions: Shiller P/E works well for stock selection within Large Cap. Mean reversion for earnings growth seems to happen much more within the Large Cap universe than within SMID. The improvement in earnings growth for ...

Over the last year, our Large Cap portfolio has had a meaningful overweight in a select group of Semiconductor stocks. As Fig. 1 shows below, these names have been solid contributors to our portfolio returns as they have outperformed ...

•     Introduction: How to Define Quality? •     Quality Persistence and Kailash’s Simple Quality Proxy o     Return on Equity o     Accruals o     EBITDA Margins •     Quality Performance •     Conclusion: Kailash Core Models Work ...

• Introduction: The Drawbacks of Indices Weighted by Market Cap • Equal Weight and Smart Beta Are at Best Only Partial Solutions • Cheap & Small: The Success Paradox ...

December View Reviewed Subsequent Performance Current Level of Conviction December View Reviewed In our December 2013 piece, The Sphinx Guarding Technology Returns: The Complex Role of Valuation within IT, we discussed the difficulties inherent in picking IT stocks. We ...

Introduction Cheapest vs. Most Expensive Deciles Fundamental Consternation & Consideration Using Our Core Model to Expand the Opportunity Set Summary Tables Conclusions Exhibits Introduction In our first paper published today, Bubble Trouble? Comparing the Current Market to 1999 and ...