We are currently in one of the most difficult economic environments many of us will see if our lifetimes. Even though the unemployment rate has fallen from its high of 15% to a level below 10%, it still exceeds the peak from the 2008 crisis, which itself was one of the deepest recessions ever. Small businesses and entire industries, like air travel, cruise lines and hotels are struggling mightily as the various degrees of lockdowns we have experienced in recent months have taken a huge toll. But despite all of that, the stock market currently sits at all time highs. 

In this episode, we look at the reasons for this disconnect. 

We discuss: 

- Why it is not uncommon for the stock market to become disconnected from the economy

- Why the businesses we see struggling in our everyday lives aren't the most important ones to the market

- The implications of unprecedented levels of government stimulus

- Why psychology can often explain short-term market moves better than fundamentals

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

Technology has allowed all of us to personalize many aspects of our lives. Rather than accept products tailored to a wide range of people, we are now able to customize products we use based on our specific needs and preferences. 

But in the world of investing, most investors continue to invest in prepackaged indexes like the S&P 500 that are the same for everyone. That may be about to change, though. 

The combination of new technology, the elimination of brokerage commissions, and the ability of investors to purchase partial shares of individual securities have come together to create a product that allows investors to build indexes that meet their individual preferences. 

That product is direct indexing.

In this episode we talk about the pros and cons of direct indexing and the details of how it works. 

We discuss:

- the potential tax benefits of owning the individual stocks within an index instead of an index fund

- the double edged sword of personalization

- the behind the scenes details that are important to understand when looking at direct indexing strategies 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

Trading volumes at online brokers have skyrocketed since the Coronavirus crisis began. If there is one lesson these newly minted traders have learned so far, it is that the market does nothing but go up. But more seasoned investors know that the market, and these traders, will eventually fall upon tough times. In this episode, we discuss some investing lessons that these new traders could learn from legendary investor Peter Lynch. 

We discuss: 

- The importance of understanding the businesses behind stocks you invest in

- How to distinguish luck from skill

- Why investors should avoid "Cutting Their Flowers and Watering Their Weeds"

- Why making mistakes early in your investing career can be a good thing 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

In this episode we are joined by Professor Partha Mohanram. Professor Mohanram is the John H. Watson Chair in Value Investing at the Rotman School at the University of Toronto. His paper "Separating Winners from Losers among Low Book-to-Market Stocks using Financial Statement Analysis" is also the basis for one of the quantitative models we run on Validea. In this interview, we cover a wide range of topics based on Professor Mohanram's research, including: 

- The criteria of his G Score strategy

- Whether accounting standards should change to account for intangible assets

- The balance between quality and value in portfolio construction 

- Separating winners from losers in Financial stocks

- Whether investors can profit from information on Twitter 

FOLLOW PROFESSOR MOHANRAM ON TWITTER

https://twitter.com/pmohanram

PROFFESSOR MOHANRAM'S RESEARCH

https://www.rotman.utoronto.ca/FacultyAndResearch/Faculty/FacultyBios/Mohanram

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK Twitter:

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter:

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

Value investors have fallen on difficult times in the most recent decade. Value's extended underperformance has led many to question whether the strategy still works or if it is broken in some fundamental way. In this episode, we look at these arguments and discuss why we still believe in value. 

We discuss:

- Whether value is cheap on a relative and absolute basis

- If the risk- and behavioral-based arguments for value still hold

- Why history gives us some reason for optimism

- Why underperfomance would not be what we would expect if value is truly dead 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK 

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN 

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

In this episode, we are joined by Lawrence Cunningham. He is a professor at George Washington University and one of the world's leading experts on Warren Buffett. He is also the author of many excellent investing books including "Dear Shareholder", "The Essays of Warren Buffett", "Quality Investing", and the upcoming "Quality Shareholders: How the Best Managers Attract and Keep Them".  

We discuss a wide range of topics, including:

- the key traits that have led to Warren Buffett's long-term success 

- the characteristics of a quality shareholder and what companies can do to attract and keep them 

- the impact of the rise of passive investing on corporate governance

- the most important attributes that can help to identify quality companies and whether they can be quantified. 

We hope you enjoy the discussion. 

FOLLOW PROFESSOR CUNNINGHAM ON TWITTER

https://twitter.com/cunninghamprof

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK Twitter:

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter:

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

Valuing a company (or the market in general) typically involves looking at its price and judging that price relative to its current and projected future fundamentals. But some have argued that this process has become broken in the most recent decade and other factors have become more important than actual results. In this episode, we talk about some of these factors, how they have impacted the market, and what they might mean for the future. 

We discuss: 

- How Fed policy has impacted the market in general and the relative valuations of value and growth

- Why narratives can sometimes be more important than fundamentals

- Whether passive fund flows are distorting the market 

ABOUT THE PODCAST 

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES 

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA 

https://www.validea.com

FOLLOW OUR BLOG 

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL 

https://www.valideacapital.com

FOLLOW JACK Twitter: 

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter: 

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

Buying expensive stocks has historically been a terrible investing strategy. On average, expensive stocks significantly underperform the market as a whole over time. But despite the poor performance of the group, the absolute best performing individual stocks typically come from within this universe. The difficult part is trying to identify them in advance. In this episode, we look at a quantitative growth strategy developed by Partha Mohanram, a professor at the University of Toronto, and how it seeks to find diamonds in the rough among growth stocks. 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK Twitter:

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter:

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

The process of learning from your mistakes is an important part of improving yourself over time both as an investor and as a person. But it requires that you learn the right lessons and don’t draw the wrong conclusions from your failures. And sometimes that is easier said than done. In this episode, we talk about some ways that learning from your mistakes can be counterproductive. 

We discuss: 

- Why a significant failure early in our careers led us to overcompensate later on

- Why learning the right lesson at the wrong time can be dangerous

- The importance of judging process and not outcome when learning from your mistakes

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK Twitter:

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter:

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

In this episode we are joined by Vitaliy Katsenelson. Vitaliy is the author of the popular Contrarian Edge blog and the CEO of investment firm IMA. 

As quantitative investors, we often find we learn the most from investors who use very different approaches than we do. As a discretionary value investor and long-term student of value investing, Vitaliy provides us with an alternate take on value and the advantages a discretionary approach can offer in uncertain times. 

We discuss: 

- How COVID-19 has changed the game of value investing

- Why buying great companies sometimes isn't a great investing strategy

- The importance of developing a process to challenge your own beliefs

VITALIY'S BLOG

https://contrarianedge.com/

FOLLOW VITALIY ON TWITTER

https://twitter.com/vitaliyk

VITALIY'S FIRM

https://imausa.com/

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK Twitter:

https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN Twitter:

https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau