The “Magnificent 7” refers to a group of seven elite large-cap technology companies that have delivered outstanding long-term returns and growth. These companies have come to dominate the U.S. stock market, making up over 25% of the S&P 500 by market capitalization. These tech and consumer behemoths have achieved massive scale and profitability, driving the bulk of the market’s gains in recent years. As the top companies in the world’s largest economy, they are seen as the leaders of the digital economy and the faces of American innovation and global success. So how do these magnificent 7 ..read more

Finding companies with sustainable competitive advantages, or “wide moats” can be key for compounding returns over time. Just like the moats that surrounded medieval castles to protect them from invaders, an economic moat protects a company’s profits and market share from competitors. Legendary investor Warren Buffett has built his immense fortune by focusing on wide moat companies. There are several major sources of moats including: Intangible Assets like strong brand names, patents or regulatory licenses High Switching Costs that make it expensive or inconvenient for customers to ..read more

Free cash flow (FCF) is the cash that a company generates from its operations after accounting for capital expenditures. It represents the money that a company has available to distribute to shareholders, pay down debt, or reinvest in the business. Free cash flow is an important metric because it shows a company’s true profitability and ability to generate cash, which is ultimately what drives shareholder value. Why is Free Cash Flow Important? Studies have shown that companies with high free cash flow yields tend to outperform the market over the long term. The reason free cash flow is so im ..read more

Joseph Piotroski, a professor of accounting at the University of Chicago, published a groundbreaking research paper in 2000 titled “Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers”. In the study, Piotroski laid out a compelling case for using financial statement analysis to separate winners from losers among the cheapest stocks. His findings form the basis of the Validea Book/Market Investor model. Piotroski’s Research: Finding Bargain Stocks Ready to Rebound Piotroski’s key insight was that by focusing on stocks with high book-to-market ..read more

In this episode of Two Quants and a Financial Planner, we dive into the important topic of withdrawal rates and retirement planning. We discuss how Monte Carlo simulations can help us understand the potential outcomes and risks associated with different withdrawal strategies. We also explore the concept of sequence of returns risk and how it can impact a portfolio’s longevity. Additionally, we examine how utilizing different asset classes and employing factor investing can potentially enhance retirement outcomes. Watch on YouTube Subscribe on Apple Podcasts Subscribe on Spotify The post Th ..read more

What is Momentum Investing? Momentum investing is a strategy that aims to capitalize on the continuance of existing trends in the market. It involves buying stocks that have performed well in the recent past and selling those that have performed poorly, based on the idea that those trends will persist in the near-term future. Momentum investors believe that stocks which have outperformed recently will continue to do so, while those that have underperformed will continue lagging. Why Does Momentum Investing Work? The core premise behind momentum investing is that markets are slow to react to n ..read more

In this episode we are joined by Andy Constan, founder of Damped Spring Advisors. We discuss his outlook on the current economic landscape, why he left “higher for longer” island, inflation, the Fed’s actions, the bond market, and the influence of Treasury Secretary Janet Yellen and a lot more. He also shares his views on defining alpha and beta in investing, and how he constructs portfolios to generate long-term returns. Finally, Andy expresses his biggest concerns and reasons for optimism looking out over the next 12-18 months. Watch on YouTube Subscribe on Apple Podcasts Subscribe on Sp ..read more

Many investors who focus on dividends look for high yields. But that can be a trap since many companies with high yields have significant problems with their businesses and those high yields can be an illusion. One often overlooked strategy for dividend investors is focusing on dividend growth instead of yield. By focusing on high-quality companies with strong competitive advantages and long track records of increasing their dividends each year, dividend growth investors can find stocks that offer the potential for both solid returns and a reliable, growing income stream. Advantages of Divide ..read more

In investing, there is supposed to be a clear tradeoff between return and risk. Strategies that reduce risk are also supposed to come with a corresponding reduction in return But one factor defies that tradeoff. In this episode, we look at the low volatility factor. We discuss how it is measured, why it works and how it can be used in portfolios. We also examine some popular low volatility ETFs and look at the key criteria investors should look at when evaluating them. Watch on YouTube Subscribe on Apple Podcasts Subscribe on Spotify The post An In Depth Look at Low Volatility Investing ap ..read more

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