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Author: palmersq   😊 😞
Number: of 12537 
Subject: WSJ article - Value investing needs a tuneup
Date: 02/12/2025 1:15 AM
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No. of Recommendations: 1
Sorry that this could be behind a paywall?

https://www.wsj.com/finance/investing/the-magnific...
"The Magnificent 7 Are So Last Year. Cash Cows Are the New Kings."

I think this is worth pondering for many people.

"The investing secret that helped make Warren Buffett a multibillionaire isn’t working anymore, though probably not for the reason you would think."
"Value investing was never dead—it just had a measurement problem. Plenty of investors, including Joel Greenblatt of “Magic Formula” fame, and even Buffett himself, ignore the academic straitjacket plaguing some value indexes."

The writer extolled the virtue of using FCF-based measures.
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Author: hclasvegas   😊 😞
Number: of 12537 
Subject: Re: WSJ article - Value investing needs a tuneup
Date: 02/12/2025 8:11 AM
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" Sorry that this could be behind a paywall?"

Thanks for sharing it, we all know how to read it!
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Author: rayvt ⎊🐝  😊 😞
Number: of 12537 
Subject: Re: WSJ article - Value investing needs a tuneup
Date: 02/12/2025 10:12 AM
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Thanks for sharing it, we all know how to read it!

For those who don't, brave browser gets around them half the time.
For most of the rest, archive.ph

In this case, https://archive.ph/P5N3H


Yay Free Cash Flow.

Unfortunately, QQQE, FCNTX, and SPY all beat COWZ. Also QQQ, but here I invoke the Slaughter Rule.
https://testfol.io/?s=iyCs3SZqQst


I wonder if the appeal of things like COWZ is people who implicitly believe that dividends are free money.
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Author: rnam ✧  😊 😞
Number: of 12537 
Subject: Re: WSJ article - Value investing needs a tuneup
Date: 02/12/2025 10:33 AM
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The problem with many of these factor based value indices is that they get over weighted with cyclical sectors. Five of the top 10 stocks are in oil & gas sector. 23% of the holdings are in energy sector. Energy is deeply cyclical, and the temporary high cash flow can reverse dramatically in the down cycle.

I have seen this in many other "value" investments. High dividend funds overweight in utilities and REITs. Low PB overweight in banks and insurance.

It would be great to combine these value factors with above average revenue growth / share. Any suggestions on ETFs that do that?
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