Investment Philosophies, 2e – Successful Strategies and the Investors Who Made Them Work

<p>CHAPTER 1 Introduction 1</p>
<p>What Is an Investment Philosophy? 2</p>
<p>Why Do You Need an Investment Philosophy? 3</p>
<p>The Big Picture of Investing 4</p>
<p>Categorizing Investment Philosophies 7</p>
<p>Developing an Investment Philosophy 10</p>
<p>Conclusion 12</p>
<p>Exercises 13</p>
<p>CHAPTER 2 Upside, Downside: Understanding Risk 15</p>
<p>What Is Risk? 16</p>
<p>Equity Risk: Theory–Based Models 16</p>
<p>Assessing Conventional Risk and Return Models 32</p>
<p>Equity Risk: Alternative Measures 34</p>
<p>Equity Risk: Assessing the Field 45</p>
<p>Default Risk 46</p>
<p>Conclusion 50</p>
<p>Exercises 51</p>
<p>CHAPTER 3 Numbers Don t Lie Or Do They? 53</p>
<p>The Basic Accounting Statements 53</p>
<p>Asset Measurement and Valuation 55</p>
<p>Measuring Financing Mix 62</p>
<p>Measuring Earnings and Profitability 69</p>
<p>Measuring Risk 75</p>
<p>Differences in Accounting Standards and Practices 82</p>
<p>Conclusion 82</p>
<p>Exercises 85</p>
<p>CHAPTER 4 Show Me the Money: The Basics of Valuation 87</p>
<p>Intrinsic Value 87</p>
<p>Relative Valuation 110</p>
<p>Valuing an Asset with Contingent Cash Flows (Options) 119</p>
<p>Conclusion 121</p>
<p>Exercises 122</p>
<p>CHAPTER 5 Many a Slip: Trading, Execution, and Taxes 125</p>
<p>The Trading Cost Drag 125</p>
<p>The Components of Trading Costs: Traded Financial Assets 127</p>
<p>Trading Costs with Nontraded Assets 146</p>
<p>Management of Trading Costs 148</p>
<p>Taxes 150</p>
<p>Conclusion 159</p>
<p>Exercises 160</p>
<p>CHAPTER 6 Too Good to Be True? Testing Investment Strategies 163</p>
<p>Why Does Market Efficiency Matter? 163</p>
<p>Efficient Markets: Definition and Implications 164</p>
<p>Behavioral Finance: The Challenge to Efficient Markets 170</p>
<p>A Skeptic s Guide to Investment Strategies 204</p>
<p>Conclusion 206</p>
<p>Exercises 207</p>
<p>CHAPTER 7 Smoke and Mirrors? Price Patterns, Volume Charts, and Technical Analysis 209</p>
<p>Random Walks and Price Patterns 209</p>
<p>Empirical Evidence 211</p>
<p>The Foundations of Technical Analysis 239</p>
<p>Technical Indicators and Charting Patterns 240</p>
<p>Conclusion 255</p>
<p>Exercises 256</p>
<p>CHAPTER 8 Graham s Disciples: Value Investing 259</p>
<p>Who Is a Value Investor? 259</p>
<p>The Passive Screener 260</p>
<p>The Contrarian Value Investor 284</p>
<p>Activist Value Investing 293</p>
<p>Conclusion 326</p>
<p>Exercises 326</p>
<p>CHAPTER 9 The Allure of Growth: Small Cap and Growth Investing 329</p>
<p>Who Is a Growth Investor? 329</p>
<p>Passive Growth Investing 330</p>
<p>Activist Growth Investing 365</p>
<p>Conclusion 372</p>
<p>Exercises 373</p>
<p>CHAPTER 10 Information Pays: Trading on News 375</p>
<p>Information and Prices 376</p>
<p>Trading on Private Information 378</p>
<p>Trading on Public Information 398</p>
<p>Implementing an Information–Based Investment Strategy 421</p>
<p>Conclusion 422</p>
<p>Exercises 423</p>
<p>CHAPTER 11 A Sure Profit: The Essence of Arbitrage 425</p>
<p>Pure Arbitrage 425</p>
<p>Near Arbitrage 450</p>
<p>Speculative Arbitrage 460</p>
<p>Long/Short Strategies Hedge Funds 465</p>
<p>Conclusion 469</p>
<p>Exercises 470</p>
<p>CHAPTER 12 The Impossible Dream? Timing the Market 473</p>
<p>Market Timing: Payoffs and Costs 473</p>
<p>Market Timing Approaches 477</p>
<p>The Evidence on Market Timing 506</p>
<p>Market Timing Strategies 514</p>
<p>Market Timing Instruments 518</p>
<p>Connecting Market Timing to Security Selection 521</p>
<p>Conclusion 521</p>
<p>Exercises 522</p>
<p>CHAPTER 13 Ready to Give Up? The Allure of Indexing 525</p>
<p>The Mechanics of Indexing 525</p>
<p>A History of Indexing 527</p>
<p>The Case for Indexing 530</p>
<p>Why Do Active Investors Not Perform Better? 554</p>
<p>Alternative Paths to Indexing 562</p>
<p>Conclusion 571</p>
<p>Exercises 572</p>
<p>CHAPTER 14 A Road Map to Choosing an Investment Philosophy 575</p>
<p>A Self–Assessment 575</p>
<p>Finding an Investment Philosophy 579</p>
<p>The Right Investment Philosophy 581</p>
<p>Conclusion 583</p>
<p>Exercises 584</p>
<p>Index 585</p>