Jack Vogel, Ph.D., conducts research in empirical asset pricing and behavioral finance, and is a co-author of two books: DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth and QUANTITATIVE MOMENTUM. His academic background includes experience as an instructor and research assistant at Drexel University in both the Finance and Mathematics departments, as well as a Finance instructor at Villanova University. Dr. Vogel is currently a Managing Member of Alpha Architect, LLC, an SEC-Registered Investment Advisor, where he heads the research department and serves as the Chief Financial Officer and co-CIO. He has a PhD in Finance and a MS in Mathematics from Drexel University, and graduated summa cum laude with a BS in Mathematics and Education from The University of Scranton.
1. Let’s start with some basic definitions that seem to trip people up. What are the differences between “growth” and “momentum” strategies?
2. You argue in your book that value and momentum investing are like cousins, or two sides of the same behavioral coin. So why does the idea of momentum investing remain so repulsive to most value investors? Why the religious zealotry in an industry that prides itself on being hyper-rational?
3. If you’re index fund investor, you’re effectively investing in both value and growth strategies at all times. Why might you be better off with a basket made up of value + momentum instead?
4. There are so many different ways to slice momentum. What criteria did you find that worked to define the quality of momentum and what were some reasons all momentum isn’t created equally? And where does trend following fit in? Is there any timing information in momentum?
5. For a concentrated value investor, can adding momentum be as simple as, if individual Stock A and Stock B are on par, pick the one with the strongest relative strength? Or are you in favor of a more diversified approach?
In this week's Five Good Questions, we're interviewing Erik Kobayashi-Solomon about his book The Intelligent Options Investor.
Erik Kobayashi-Solomon is a 20-year veteran of investment banking, hedge funds, and third-party analysis industry. He is also the co-founder of IOI Investor Services, LLC, a company that helps institutional and individual investors close the gap between their investment responsibility and their skill set. His book, The Intelligent Option Investor, was published by McGraw-Hill as a well-regarded contribution to the value investing community.
1. Many value investors may feel like options are dangerous, I know I did. Why was I wrong to be fearful and how can options be a useful tool for an investor?
2. Assuming your analysis leads you to believe a company is undervalued, why might options be better expression than just buying and holding? What about the element of timing that options introduce?
3. If you don’t believe in the Efficient Market Hypothesis, why should you be especially attracted to options investing?
4. What is delta, and what can it tell us about Mr. Market?
5. What are LEAPS and are they a good first step for a traditional value investor to dip their toe in the options water? How would address the concern that an investor might feel about getting comfortable with the relative trade-offs of premium price vs. tenor and strike price?
Suzanne Heywood is a Managing Director of EXOR. Suzanne grew up sailing around the world on the Schooner Wavewalker (she is currently writing another book, “Wavewalker” about this experience which included getting shipwrecked in the Indian Ocean). After university she started her professional career in the UK Government at the Treasury and then went on to become a Senior Partner at the management consultancy firm McKinsey. Suzanne is also a board member of CNH Industrial and The Economist and Deputy Chairman of the Royal Opera House. She has a MA from Oxford University and PhD from Cambridge University. Suzanne is an expert in organizational design and for many years led work on this topic for McKinsey globally.
1. What are the keys to effective communications with employees during a reorg?
2. Walk us through what a successful reorg looks like.
3. What’s the 20-30-50 rule of thumb?
4. What are the biggest mistakes made during a reorg? Why do reorganisations fail?
5. If you have to let someone go, what are some creative ways to do so in a classy and humane way?