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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (11786)	1/10/2001 8:34:22 PM
From: Kapusta Kid	Read Replies (1) of 78476

"Buy solid companies currently out of market favor, as measured by their low price-to-earnings, price-to-cash flow or price-to-book value ratios, or by their high yields." David Dreman A different opinion is expressed by Ken Fisher, author of "Super Stocks", that Price to Sales is the ticket. This was seconded by James P. O'Shaughnessy in "What Works on Wall Street". JPO is a "quant" who tested 45-55 years of data and found that the best performance was turned in by a portfolio of stocks with a PSR < 1 and which had a high relative strength in terms of price. That last fact may seem counterintuitive (especially to this thread--it is to me), but that portfolio bested the runner-up by a good margin. The second place portfolio consisted of stocks with an Earnings Yield > 5 and also had high relative strength. Apparently the momentum boys are onto something. If I remember correctly, Dreman's strategies did well in O'Shaughnessy's results.

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