Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 0
If you were to pick one fund most likely to beat the S&P over the next ten years, which would it be? Berkshire is not an option.
No. of Recommendations: 2
Invesco S&P 500 GARP ETF (SPGP)
Baltassar
No. of Recommendations: 3
VanEck Morningstar Wide Moat ETF (MOAT)
No. of Recommendations: 3
If you believe US markets esp. large cap growth are overvalued, maybe a bet on international small cap value stock in the AVDV ETF will beat S&P500.
An excellent and aggressive idea is actively managed Avantis International Small Cap Value ETF, which is absurdly cheap by all statistical measures.
AVDV focuses on low price-to-book ratios (excluding Goodwill) and a high cash-backed measure of profitability.
https://seekingalpha.com/article/4585730-avdv-inte...
No. of Recommendations: 1
Also from Avantis is a new fund of funds ETF coming out next month, ticker AVGV. It's five Avantis value ETFs in one ETF solution.
U.S. Value Stocks ' 60% target; acceptable range of 50-70%
AVLV ' Avantis U.S. Large Cap Value ETF
AVUV ' Avantis U.S. Small Cap Value ETF
Ex-US Developed Markets Value Stocks ' 30% target; acceptable range of 20-40%
AVIV ' Avantis International Large Cap Value ETF
AVDV ' Avantis International Small Cap Value ETF
Emerging Markets Value Stocks ' 10% target; acceptable range of 5-20%.
AVES ' Avantis Emerging Markets Value ETF
No. of Recommendations: 1
Thank you everyone. Great ideas for me.
No. of Recommendations: 0
Here are a few good ones.
syld, cowz, calf
No. of Recommendations: 25
My suggestion is QQQE.
(the ETF that tracks the Nasdaq 100 equal weight index)
That's not a conventional suggestion for a "value" fund, but value is mainly a function of what you get for your money, not the style of business.
In this case, based on history, it's a collection of firms that seem to have earnings rising faster than most, meaning lots of future value.
Hence, a value fund.
Remember that this isn't trying to extrapolate the outrageous returns of a few outliers like Amazon or Apple or Google...each firm is forever only 1% of the fund.
The past indicates that the group as a whole tends to do well, measured in the old fashioned way as rising net earnings.
I redid my calculations of what a normal pricing level would be for this ETF.
Based on the average historical valuation based on the trend real earnings of this group, I'd peg the normal price today at about $65.50 to $71.50, with CPI at 303.363.
My best guess of "fair value" is $68, so today's QQQE price of $70.56 is not cheap, but quite reasonable.
Given the historically formidable rate of value growth (trend line about inflation + 8%/year, plus maybe 0.5% dividends), it seems a good pick.
The notion that today's price is reasonable includes the implicit assumption that future years will resemble past somewhat, both in valuation multiples and value growth rates.
Especially since around 2005.
The assumptions could be off by a fair bit and it might still be an above-average fund pick.
This sort of valuation exercise certainly won't have you putting your money into the S&P 500 these days, whether cap weight or equal weight.
Jim
No. of Recommendations: 13
Here's a more "off the wall" suggestion: become a Mormon!
There was an article today about the 10 largest holdings in the Mormon church's portfolio.
https://finance.yahoo.com/news/top-10-holdings-mor...I have to say, it's not a bad set of picks. I have seen way worse.
Top holdings are, in decreasing order of position size:
Apple
Microsoft
Alphabet
United Health
Amazon
Exxon
Nvidia
Mastercard
J&J
Meta
Jim
No. of Recommendations: 7
<< My suggestion is QQQE. >>
I followed Jim's suggestion for QQQE from back on the Fool board when
the subject under discussion was QQQE vs Google.
Ultimately I decided on the former for multiple reasons, but basically
QQQE is something I can hold for a long time without worrying about single
company risk.
-Rubic
No. of Recommendations: 0
Aaalll agreed with Jim.
Just be aware that QQQ has outperformed QQQE on price by @30% over the last 5 years - with significantly more volatility, of course.
Just FYI.
rc
No. of Recommendations: 6
'Given the historically formidable rate of value growth (trend line about inflation + 8%/year, plus maybe 0.5% dividends), it seems a good pick.'
I also followed Jim's rationale and thoughtful posts on QQQE and it's been right on projected target- up 15% since purchase (6/30/22). It will be my 'new' target for any funds directed towards an index (had been SPY for years). Thanks Jim for shining the light and sharing your data.
No. of Recommendations: 1
How are companies chosen for the Nasdaq-100 index? I'm having difficulty finding out. Is it a rules-based system?
https://www.nasdaq.com/solutions/nasdaq-100"The Nasdaq-100 Index (NDX®) defines today's modern-day industrials'comprised of 100 of the largest and most innovative non-financial companies listed on the Nasdaq Stock Market based on market capitalization."
QQQE is the same list, equal-weighted.
Note that QQQE has distributed capital gains. Might not be a good choice for a US taxable account.
https://www.direxion.com/product/nasdaq-100-equal-...
No. of Recommendations: 0
>>How are companies chosen for the Nasdaq-100 index? I'm having difficulty finding out. Is it a rules-based system?<<
Well, I just asked Bard (it does seem smarter than me):
The Nasdaq 100 is an index of the 100 largest non-financial companies listed on the Nasdaq stock exchange. Companies are selected for the index based on the following criteria:
They must be listed exclusively on Nasdaq.
They must have been publicly traded for at least three months.
They must have an average daily trading volume of at least 200,000 shares.
They must be current in their quarterly and annual reporting.
They must not be in bankruptcy proceedings.
The index is rebalanced quarterly, and companies can be added or removed from the index based on their performance. The Nasdaq 100 is a popular benchmark for investors, and it is often used as a proxy for the overall health of the Nasdaq stock exchange.
No. of Recommendations: 1
No. of Recommendations: 28
How are companies chosen for the Nasdaq-100 index? I'm having difficulty finding out. Is it a rules-based system?
...
Well, I just asked Bard (it does seem smarter than me):
May I humbly (yet with great emphasis) suggest nobody ever post information from a generative AI?
In this case the key point--it's the 100 largest non-financial firms on Nasdaq--is pretty much correct.
(they only kick you out after you fall below rank 105).
But, let's be very clear about this, the fact that it's correct is purely a coincidence. It's a bullshit machine which happens to be right, or close, sometimes.
In this case the response is a muddled mix of things about the Nasdaq 100 and the Nasdaq 100 Equal Weight indexes.
The index constituents are chosen only annually for both, a pretty important point it doesn't mention.
The equal weight is rebalanced quarterly.
The non-equal-weight index is NOT cap weighted. It's the one that is a popular benchmark, not the equal weight index that I presume you asked about, which is very niche.
Eligibility is open to non US firms and ADRs, but only if they have US listed options.
Let's make a consensus note not ever to post generative AI text on any subject.
It will be hard enough to avoid in the years to come, so there is no need to pollute our own swimming pool as well.
If its poetry ever gets to be any good, we can consider an exception for that.
Separately---
Just be aware that QQQ has outperformed QQQE on price by @30% over the last 5 years - with significantly more volatility, of course.
The Nasdaq 100 Equal Weight index (e.g., QQQE) can be thought of as a very good tracker of a certain style of company, without material company specific risk.
The "normal" (broken cap weight) is best thought of as the same thing, plus or minus a huge random number based on the company-specific fortunes of a handful of very large firms.
The random number has been kind in some recent years, which has recently caused the result you mention.
But--
* One should not attempt to extrapolate that result. The gap will just be more random numbers.
Bearing in mind that the very largest cap firms are historically on average underperformers over time, the dice are arguably slightly weighted against QQQ in the long run.
* If you have informed opinions on the fortunes of those few very big firms, buy or short those, don't use QQQ.
* If you don't have informed opinions on those few firms, don't use QQQ.
Jim
No. of Recommendations: 1
How are companies chosen for the Nasdaq-100 index?
...
Well, I just asked Bard (it does seem smarter than me):
May I humbly (yet with great emphasis) suggest nobody ever post information from a generative AI?
In this case the key point--it's the 100 largest non-financial firms on Nasdaq--is pretty much correct.
(they only kick you out after you fall below rank 105).I didn't realize it was so simple: it's the 100 largest non-financial firms on Nasdaq. Obvious (now that I know).
Here's a non-AI generated explanation:
https://www.investopedia.com/terms/ndxe.aspIt's not my cup of tea, but that's what makes a market.
No. of Recommendations: 1
TL;DR of "Beating the S&P 500 at it's own game"
"I cannot explain why the equally weighted portfolio has been superior to the sum of its parts. I cannot prophesy that its success will continue. Nor can I generalize about the strategy's effectiveness when employed on indexes beside the S&P 500. I am merely reporting the findings, which have been impressive. Dean Witter's fund suffered from poor timing, and even more greatly from absurdly high expenses. Its failure tarnished the reputation of equally weighted indexes. As the past 25 years have demonstrated, though, the concept clearly possesses merit."
No. of Recommendations: 2
No. of Recommendations: 1
If you believe US markets esp. large cap growth are overvalued, maybe a bet on international small cap value stock in the AVDV ETF will beat S&P500.
An excellent and aggressive idea is actively managed Avantis International Small Cap Value ETF, which is absurdly cheap by all statistical measures.
AVDV focuses on low price-to-book ratios (excluding Goodwill) and a high cash-backed measure of profitability.Just saw this Tw***er thread:
https://twitter.com/Jesse_Livermore/status/1659403...Investing motto I'm using for the 2020's decade:
(1) International over Domestic
(2) Value over Growth
(3) Small over Large
Charts below are P/E & CAPE (absolute, normalized to avg, relative) for INTL DM (EAFE) Small-Mid Cap Value and US Large Cap w/ Value removed. Very cheap!
...
Keeping it simple: doing the opposite of what worked in the prior decade. More likely to see the huge valuation and currency discounts that accumulated over that period revert towards normal than to see another huge discount get built up on top of the one that's already there.
...
Some options are:
$AVDV
$ISVL (newer, less liquid, same performance)
