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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: Freedom Fighter who wrote (1207)2/8/1999 3:15:00 PM
From: Boyd Hinds  Read Replies (1) of 1722
 
Did anyone else read the article written by Mark Hulbert in the Sunday Feb 7 NYT entitled "Why the Tortoise isn't beating the Hare?"

I can't provide the link because it costs money to download the article. Essentially, the results of comparing value to growth stocks over a period of July 1963 - Dec 1995 show that the most dramatic differences in performance are due to market cap.

In fact, according to a study by Tim Loughran (prof at Univ. of Iowa), value significantly outperforms growth only among the smallest stocks. Small in this case being under $200 Million in market cap.

The graph pictured shows that for the smallest 20% of companies, value stocks outperformed growth stocks by an average of 11.3% per year!!

This study has been published in the Journal of Financial and Quantitative Analysis.

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