Tag Archives: Validea

Accounting Professor Joseph Piotroski’s Investing Ideas Beat Wall Street Gurus

Among the very most successful stock investing strategies of the year has been one focused on companies selling cheap but with strong book values. The strategy isn’t the brain child of Wall Street legends. It’s one developed by someone you may well have never heard of, a reserved Stanford accounting professor named Joseph Piotroski. In a paper published in 2000 by the Journal of Accounting Research Piotroski outlined the filters used to achieve 23 percent annual returns between 1976 and 1996. Piotroski’s ideas were compelling enough to attract the attention of John Reese, founder and CEO of Validea and Validea Capital Management, (pictured). Reese has spent the last 15 years studying history’s best investors and then building investment strategies based on that research. Among his “gurus”: Warren Buffett, Peter Lynch, and Ben Graham. So far this year, Piotroski’s method has topped those three, and the rest of Reese’s portfolios.

In this guest post, updating an earlier piece on his blog The Guru Investor,  Reese explains the Piotroski strategy and offers some stocks that fit the bill today. Continue reading

Investing like James O’Shaughnessy

In any field it’s fascinating to watch what the heavy weights are up to.  John Reese, founder and CEO of Validea and Validea Capital Management, (pictured) has spent the last 15 years studying history’s best investors and then building investment strategies based on that research. Among his “gurus”:  Warren Buffett, Peter Lynch, Ben Graham and others. In the August 20th, 2010 issue of his newsletter, the Validea Hot List, Reese takes an in-depth look at James O’Shaughnessy, an expert in quantitative stock modeling. O’Shaughnessy’s methods have inspired a Validea strategy which Reese says has averaged more than 8% annualized returns since its inception seven years ago, a period in which the S&P 500 has returned about 1.2% per year.

Below is a reprint of part of Reese’s write-up and a list of current stocks that score highly based on his O’Shaughnessy model. Continue reading