You wrote:
BUT all these do is take the slowest growing, most depressed big-caps and through them togetther. I think most value investors would agree that there is not much reason to call that value investing.
I would submit that is what all indices do whether its the Wilshire, Russell, S&P 500, etc. All indices tend to be a random combination of stocks where ANY investor would agree that there is not much reason to call that investing, period.
Further, I think you'd be surprised to know some of the names in these value indices and question whether they are value stocks at all. Example: S&P/BARRA Value contains 390 stocks including Kla-Tencor, Hewlett Packard, Motorola, American Express, Novellus Systems, American Intl Group, Disney, and on and on. Russell 1000 Value contains 758 stocks including GE, Wal Mart, American Intl Group, Coca Cola, Hewlett Packard, Johnson & Johnson, Qwest, American Express and on and on.
Short of creating your own index based on your investing style (screening techniques, similar attributes and fundamentals) there will always be issues associated with finding an appropriate benchmark to measure portfolio performance. It is not unique to value investing. I do agree with you that a comprehensive universe comparison is a better way to go in determining the relative performance of a manager but those typically come at a cost.
Cheers,
JS |
