Content of Current Issue   February 2012

SPECIAL FOCUS
The (Strong) Case for Value Investing
Classifying stocks by their price-to-book ratio is enough to establish a successful trading strategy that earns annual returns of 10.5% in the United States and 9.1% on the international markets with no market risk or liquidity issues.
  
RESEARCH HIGHLIGHTS
Outperforming with the Enterprise Multiple
Some valuation metrics are better than others – and more reliable. A forthcoming article shows how the enterprise multiple has performed over a 46-year period and how a trading strategy based on this sole criterion exceeds 5% per year.
  
The True Impact of Competition
Understanding how competition affects a firm’s future profitability is not an easy task. A recent study provides valuable insights on this very subject and presents how to earn 21.5% per year with the asset growth strategy.
  
ACADEMIC DIGEST
Betting on US Holidays: +383% in Annualized Returns
A very simple strategy based on the extreme reactions of European stock markets when US markets are closed can be set to yield substantial returns.
  
Trading Successfully as with Family-Owned Firms
Family members of family-controlled firms are known to have access to private information ahead of most market participants. A simple metric allows anyone to find which firm will yield abnormal returns in subsequent periods.
  
General Counsel? A 12.6% Impact in Six Months
Trades by corporate insiders usually yield returns that are higher than average. This is due to their access to privileged information. A recent study examines the actions taken by the general counsel to mitigate the level of informed trades.
  
Arbitrage Opportunities on Berkshire Hathaway
Warren Buffett’s Berkshire Hathaway corporation seems too large and acclaimed to allow day-traders to exploit any mispricing between the firm’s class A and class B shares. Novel findings show how investors can however profit from such inefficiencies.
  

EVERY ISSUE INCLUDES THE FOLLOWING BENEFITS:
   
  A monthly review of more than 70 top journals  in finance
  
  A special focus on today’s hottest themes in financial research
  
  An analysis of the most recent findings in investment strategies
  
  A digest of the latest innovations in asset management
  
  Simplified investment tips to optimize asset allocations
  
  Critical comments  with a concise summary of related works
  
  A free and direct access to 20 additional working papers
  
  Hyperlinks to the published versions of all cited references

Copyright 2008-2011 © Straight from The Lab. All rights reserved.