Large Cap Portfolio Value Investing and the Hidden Opportunity in - Big Company Stock

Informationen zum Autor Thomas Villalta, CFA, is the lead portfolio manager for the Jones Villalta Opportunity Fund, and the Chief Investment Officer for Jones Villalta Asset Management. Having worked for twenty years in investment analysis and having taught university courses for seven years, Mr. Villalta brings a unique perspective that bridges theory with real-world application. In addition to having appeared numerous times on Fox Business, CNBC, AOL DailyFinance, and TheStreet.com, he has been frequently quoted in the Wall Street Journal, Barron's, Bloomberg Businessweek, CNN, and many other media outlets. Klappentext The practical guide to finding value and opportunity in large-cap stocks using investor behaviorLarge-Cap is an abbreviation of the term "large market capitalization" and refers to the stock of publicly traded companies with market capitalization values of roughly more than $10 billion, like Walmart, Microsoft, and Ford. Because of their size, the conventional view is that these companies do not present investors with an ability to be opportunistic. The Large-Cap Portfolio + Website argues that, contrary to popular perceptions, significant opportunities exist in these stocks.Written with a fluency that both the savvy amateur and professional investor will understand, the book fills a void in the market by offering the practitioner a methodology to identify and approach the major assumptions that underlie valuation, with an emphasis on issues that are more relevant to the analysis of large-cap stocks.* Full of useful information on how to reap the rewards of stocks that most investors avoid* Presents essential insights into understanding stock valuation* Includes an actionable chapter devoted to portfolio managementPacked with timely instruction, Large-Cap Portfolio gives readers invaluable insights and examples of how to build portfolios that will out-perform broad market benchmarks. Zusammenfassung The practical guide to finding value and opportunity in large-cap stocks using investor behaviorLarge-Cap is an abbreviation of the term "large market capitalization" and refers to the stock of publicly traded companies with market capitalization values of roughly more than $10 billion, like Walmart, Microsoft, and Ford. Because of their size, the conventional view is that these companies do not present investors with an ability to be opportunistic. The Large-Cap Portfolio + Website argues that, contrary to popular perceptions, significant opportunities exist in these stocks.Written with a fluency that both the savvy amateur and professional investor will understand, the book fills a void in the market by offering the practitioner a methodology to identify and approach the major assumptions that underlie valuation, with an emphasis on issues that are more relevant to the analysis of large-cap stocks.* Full of useful information on how to reap the rewards of stocks that most investors avoid* Presents essential insights into understanding stock valuation* Includes an actionable chapter devoted to portfolio managementPacked with timely instruction, Large-Cap Portfolio gives readers invaluable insights and examples of how to build portfolios that will out-perform broad market benchmarks. Inhaltsverzeichnis Acknowledgments xiPreface xiiiPART I: THE LARGE-CAP OPPORTUNITY AND CHALLENGECHAPTER 1 Trends in Large-Cap Investing and the Opportunities They Present 3Defi ning a Large-Cap Stock 4Understanding the S&P 500 Index 8Examining the Growth of Indexed Equities 10Defi ning Active Management 13So What Does This Mean for Investors? 25Two Additional Considerations 28Finally, Something Timely 29Conclusions 31Notes 31CHAPTER 2 Risk and Uncertainty 35Financial Measures of Risk 37Accounting Measures of Risk 41Differentiating between Certain and Uncertain Cash Flows 43Conclusions 48Notes 49PART II: MARKET INEFFICIENCYCHAPTER 3 An Int...

List of contents

Acknowledgments xi
 
Preface xiii
 
PART I: THE LARGE-CAP OPPORTUNITY AND CHALLENGE
 
CHAPTER 1 Trends in Large-Cap Investing and the Opportunities They Present 3
 
Defi ning a Large-Cap Stock 4
 
Understanding the S&P 500 Index 8
 
Examining the Growth of Indexed Equities 10
 
Defi ning Active Management 13
 
So What Does This Mean for Investors? 25
 
Two Additional Considerations 28
 
Finally, Something Timely 29
 
Conclusions 31
 
Notes 31
 
CHAPTER 2 Risk and Uncertainty 35
 
Financial Measures of Risk 37
 
Accounting Measures of Risk 41
 
Differentiating between Certain and Uncertain Cash Flows 43
 
Conclusions 48
 
Notes 49
 
PART II: MARKET INEFFICIENCY
 
CHAPTER 3 An Introduction to Market Efficiency 53
 
The Basis for Market Effi ciency 55
 
Effi cient Markets Hypothesis 58
 
Empirical Support for the Efficiency of Markets 59
 
Conclusions 60
 
Notes 61
 
CHAPTER 4 Evidence of Ineffi ciency in Investor Behavior and Market Behavior 63
 
Closed-End Fund Discounts and Premiums 64
 
Market Bubbles and Market Crashes 68
 
Investors vs. Their Investment . . . or Investors vs. Themselves 73
 
Book-to-Market Effects and Other Value Criteria 76
 
Conclusions 78
 
Notes 79
 
CHAPTER 5 Individual Decision Making 81
 
That Thing about Our Being Rational . . . 84
 
Bayesian, Non-Bayesian--What Does This Mean? 87
 
Great Companies Always Make Great Stocks 90
 
Representative Sequences 93
 
Now That You Put It That Way . . . 96
 
Dropping an Anchor in a Sea of Information 105
 
Conclusions 110
 
Appendix: Utility Theory and Prospect Theory 112
 
Notes 116
 
CHAPTER 6 Correlated Mistakes and the Failure of Arbitrage 119
 
Herding and Why We're Predisposed to Correlated Mistakes 120
 
Evidence of Herding in Securities Markets and in the Analysis of Common Stocks 123
 
Feedback Mechanisms and Mood Contagions 126
 
Smart Arbitrageurs Will Save Us! Won't They? 129
 
Some Related Considerations in Approaching the Active Management of Investments 133
 
Conclusions 135
 
Notes 136
 
CHAPTER 7 Conventional Views on Sources of Market Inefficiencies 139
 
Structural Impediments to Market Effi ciency 143
 
Pertinence to Large-Cap Universe 150
 
Conclusions 154
 
Appendix: Underexplained Market Phenomena 155
 
Notes 158
 
PART III: RESEARCH AND PORTFOLIO MANAGEMENT
 
CHAPTER 8 Identifying Large-Cap Stock Opportunities and Optimizing Research Processes 163
 
Identifying Large-Cap Stock Opportunities 164
 
Filters and Relative Assessments of Value 165
 
Subjective Identifi cation of Overoptimism and Overpessimism 173
 
Overconfi dence, Information Overload, and the Structure of Investment Firms 177
 
Conclusions 180
 
Notes 181
 
CHAPTER 9 Approaching Growth in Large-Cap Stock Research 183
 
Are We Good at Predicting Growth? 185
 
Equity Valuation Basics 187
 
Limitations to Estimating Long-Term Growth Rates 190
 
Abnormal Growth Magnitude and Abnormal Growth Duration 190
 
Traditional Methods for Determining Growth 196
 
Perversions of Growth Estimates in Large-Cap Stocks 199
 
Recognizing that Markets Are Effi cient over the
 
Long Term: A Refresher on Microeconomic Theory 214
 
Some Further Considerations When Predicting Growth Rates 227
 

Product details

• Authors: Jones Villalta, T Villalta, Thomas Villalta, VILLALTA THOMAS
• Publisher: Wiley, John and Sons Ltd
• Languages: English
• Product format: Hardback
• Released: 01.06.2012
• EAN: 9781118256602
• ISBN: 978-1-118-25660-2
• No. of pages: 304
• Series: Bloomberg Professional; Bloomberg Financial; Bloomberg Professional; Bloomberg Financial
• Subjects: Social sciences, law, business > Business > Business administration; Finanzwesen, Finance & Investments, Finanz- u. Anlagewesen, Spezialthemen Finanz- u. Anlagewesen, Finance & Investments Special Topics