Portfolio Engineering Concepts

Episode #86: Diversification, the Value Premium and the Importance of the Profitability Factor

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.

Or you can listen to this podcast using a streaming platform

 

DISCOVER THE PEACE OF MIND OF KNOWING YOUR INVESTMENTS AND WEALTH ARE IN GOOD HANDS BY CONTACTING PWL CAPITAL'S PARKYN-DOYON LA ROCHELLE TEAM IN MONTREAL TODAY.

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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

Stay informed and inspired. Subscribe to our Bi-Weekly Newsletter for the latest podcasts, blogs, and James & François’ top reads from the past two weeks.

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Episode #85: Active vs Passive – Who Is on the Other Side of the Trade?

Active vs Passive – Who Is on the Other Side of the Trade?

By JAMES PARKYN & FRANÇOIS DOYON LA ROCHELLE

In this Episode, James Parkyn & François Doyon La Rochelle discuss with Raymond Kerzerho, PWL’s Senior Researcher, a recent research paper from Morgan Stanley entitled “Who is on the Other Side”.

Or you can listen to this podcast using a streaming platform

 

DISCOVER THE PEACE OF MIND OF KNOWING YOUR INVESTMENTS AND WEALTH ARE IN GOOD HANDS BY CONTACTING PWL CAPITAL'S PARKYN-DOYON LA ROCHELLE TEAM IN MONTREAL TODAY.

contact us

Read The Script:

1)   INTRODUCTION:

François Doyon La Rochelle:

You’re listening to Capital Topics, episode #85!

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 this episode, we will discuss with Raymond Kerzerho, PWL’s Senior Researcher about a recent research paper from Morgan Stanley entitled “ Who is on the Other Side”.

Enjoy!

2)   ACTIVE VS PASSIVE – WHO IS ON THE OTHER SIDE OF THE TRADE:

François Doyon La Rochelle:

So welcome back to the show Ray. Today, we're unpacking a heavy-hitter report from Morgan Stanley called Who's on the Other Side. It's all about the tug of war between active and passive investing.…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

Stay informed and inspired. Subscribe to our Bi-Weekly Newsletter for the latest podcasts, blogs, and James & François’ top reads from the past two weeks.

SUBSCRIBE

Episode #84: How Much Risk Can You Take in Your Portfolio?

How Much Risk Can You Take in Your Portfolio?

By JAMES PARKYN & FRANÇOIS DOYON LA ROCHELLE

In this Episode, James Parkyn & François Doyon La Rochelle discuss crucial components of investing: Risk Tolerance & Risk Capacity.

Or you can listen to this podcast using a streaming platform

 

DISCOVER THE PEACE OF MIND OF KNOWING YOUR INVESTMENTS AND WEALTH ARE IN GOOD HANDS BY CONTACTING PWL CAPITAL'S PARKYN-DOYON LA ROCHELLE TEAM IN MONTREAL TODAY.

contact us

Read The Script:

1)   INTRODUCTION:

François Doyon La Rochelle:

You’re listening to Capital Topics, episode #84!

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 crucial components of investing which are risk tolerance and risk capacity.

Enjoy!

2)   HOW MUCH RISK CAN YOU TAKE IN YOUR PORTFOLIO:

François Doyon La Rochelle:

James, this is a topic we have wanted to tackle for a long time.  We finally get to it as PWL Capital is launching its new Risk Profiling tool.  Risk profiling is a key regulatory requirement to establish suitability for clients’ portfolios.  I am sure our Listeners will find this topic very useful. It will help them consider how their portfolio is structured and whether they may need to make adjustments. Let’s get right into it.…Read More

Links:

- Episode 61: PWL's expected returns and review of Professor Scott Cederburg's research paper — Capital Topics By James Parkyn & François Doyon La Rochelle – PWL Capital

- Episode #79: Are your expectation of Market returns too high? — Capital Topics By James Parkyn & François Doyon La Rochelle – PWL Capital

- Model Portfolios | Parkyn-Doyon La Rochelle By Raymond Kerzérho – PWL Capital

Stay informed and inspired. Subscribe to our Bi-Weekly Newsletter for the latest podcasts, blogs, and James & François’ top reads from the past two weeks.

SUBSCRIBE

Episode #73: Review of Hedge Funds: Do They Make Sense for Investors

Review of Hedge Funds: Do They Make Sense for Investors

By JAMES PARKYN & FRANÇOIS DOYON LA ROCHELLE

In this Episode, James Parkyn & François Doyon La Rochelle discusses the hedge funds industry with Raymond Kerzerho, PWL’s Senior Researcher.

DISCOVER THE PEACE OF MIND OF KNOWING YOUR INVESTMENTS AND WEALTH ARE IN GOOD HANDS BY CONTACTING PWL CAPITAL'S PARKYN-DOYON LA ROCHELLE TEAM IN MONTREAL TODAY.

contact us

Read The Script:

1)   INTRODUCTION:

François Doyon La Rochelle:

You’re listening to Capital Topics, episode #73!

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 our podcast today, we will discuss the hedge funds industry with Raymond Kerzerho, PWL’s Senior Researcher

Enjoy!

2)   REVIEW OF HEDGE FUNDS: DO THEY MAKE SENSE FOR INVESTORS

François Doyon La Rochelle:

Hello, James! How are you today?

James Parkyn:

I'm very good, Francois. And how are you?

François Doyon La Rochelle:

I'm fine, thank you! Hello, Ray, and welcome back to the podcast. We're pleased to have you with us today.

Raymond Kerzerho:

It's my pleasure to be here..…Read More

Episode 67: Why owning individual stocks in a portfolio has a high probability of a negative outcome

Why owning individual stocks in a portfolio has a high probability of a negative outcome

By JAMES PARKYN & FRANÇOIS DOYON LA ROCHELLE

In this Episode, James Parkyn & François Doyon La Rochelle will be reviewing a paper published in July 2024 by professor Hendrik Bessembinder titles “Which U.S. Stocks Generated the Highest Long-Term Returns?”. 

His findings in this research paper make the case that owning individual stocks in a portfolio has a high probability of a negative outcome. 

DISCOVER THE PEACE OF MIND OF KNOWING YOUR INVESTMENTS AND WEALTH ARE IN GOOD HANDS BY CONTACTING PWL CAPITAL'S PARKYN-DOYON LA ROCHELLE TEAM IN MONTREAL TODAY.

contact us

Read The Script:

1)   INTRODUCTION:

François Doyon La Rochelle:  

You’re listening to Capital Topics, episode #67! 

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 our podcast today we will review the findings from a research report from Dr. Hendrik Bessembinder published in July 2024 entitled “Which U.S. Stocks Generated the Highest Long-Term Returns?”  

Enjoy! 

2) WHY OWNING INDIVIDUAL SOCKS IN A PORTFOLIO HAS A HIGH PROBABILITY OF A NEGATIVE OUTCOME  :

François Doyon La Rochelle: 

We are back after a short summer break, I hope our listeners also enjoyed some time off. I will start this off.  We believe our listeners will find Today’s topic very insightful.  The mantra about stocks is that in the long run, you will make money despite the volatility in the short term.  What gets lost in translation about this fundamental investing belief is that it only really applies to buying the market.  Our regular Listeners know we preach broad market ETFs as optimal for most individual investors.  So, it was interesting to see research that strongly supports this investing strategy.  This summer an academic financial economist we follow, Dr. Hendrik Bessembinder - a professor at Arizona State University’s W.P. Carey School of Business - published a paper that makes the case that owning individual stocks in a portfolio has a high probability of a negative outcome.  James, why don’t you report on Professor Bessembinder’s findings?  …Read More

Links:

- Which U.S Stocks Generated the Highest Long-Term Returns? by Hendrik Bessembinder at Department of Finance, W.P. Carey School of Business – Arizona State University