Diversification, the Value Premium and the Importance of the Profitability Factor
By JAMES PARKYN & FRANÇOIS DOYON LA ROCHELLE
In this Episode, James Parkyn & François Doyon La Rochelle discuss diversification, the value premium and the importance of the profitability factor.
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Read The Script:
1) INTRODUCTION:
François Doyon La Rochelle:
You’re listening to Capital Topics, episode #86!
This is a monthly podcast about passive asset management and financial and tax planning ideas for the long-term investor.
Your hosts for this podcast are James Parkyn and me François Doyon La Rochelle, both portfolio managers with PWL Capital.
In today’s episode, we discuss diversification, the value premium and the importance of the profitability factor
Enjoy!
2) DIVERSIFICATION, THE VALUE PREMIUN AND THE IMPORTANT OF THE PROFITABILITY FACTOR:
François Doyon La Rochelle:
James, I will start this off for our Listeners. Our recent Podcasts have addressed fundamental concepts for Investors. In our Podcast #84, we tackled Risk Profiling, covering the two components of Risk Tolerance and Risk Capacity. And in our most recent Podcast #85, we did an update on the Active vs. Passive debate.
Our Listeners know that the markets are now struggling with how to figure out the short- and long-term impacts of the War in Iran. No one has a crystal ball and can predict how it will turn out. At the end of the day, what is critical for Investors is how they will manage their emotions in this sea of negative headlines. We have been consistent in telling our listeners that it is imperative they tune out the noise in the financial media. But easier said than done.
This leads us to today’s topics, which will start with a discussion about diversification. We are also going to go beyond broad market stock exposures by doing an update on two other dimensions of diversification, which are the Value premium and the Profitability factor. So, James, where would you like to start?…Read More
Links:
- Who Is On the Other Side? A Framework for Understanding Market (In)Efficiency | Morgan Stanley By Michael Mauboussin & Dan Callahan – Morgan Stanley Investment Management