Factor Investing

If you're a regular reader of The Paper Trail, you know by now that I am Kai Wu's #1 fanboy. Kai is the founder & Chief Investment Officer for Sparkline Capital and his papers are a staple in my monthly research compendium. He is prolific when it comes to applying novel approaches (unique data sets, machine learning) to classic investment frameworks (i.e. value investing) in areas where the old rules may no longer apply. Think intangible assets and crypto/Web3. 

His latest published work is titled Investing in Innovation and it was so good I just couldn't wait until the end of the month to highlight it. 

The struggles of value investing from 2008-2020 are well-trodden. That horse is already dead - no need to beat it any further. 

The past is past. It's future returns we care about. And there is much debate about whether the reversal in value's fortunes that began in 2020 has legs to it or is merely another head fake. 

It’s easy to look at any factor return premium over a multi-decade period and get lulled into a false sense of being offered a free lunch. As value and small…

Last week, Bloomberg’s Tom Psarofagis (Sarah-Fay-Guess) tweeted out this list of multifactor U.S. equity ETFs that showed their 2018 performance relative to the S&P 500, as proxied by SPY: Only…

This past weekend my wife and I ventured out to a sushi place nearby for date night. Depending on the neighborhood you’re in and the time of day, parking in…

“One thing I’ve learned is that in the investment business when you hear the word ‘never,’ it’s about to happen.” – Jeffrey Gundlach Similar to the coal that one might…

“This year I am thankful for the worst performing assets in my portfolio” – said no one ever during Thanksgiving dinner The other night, as I sat at home polishing off what…

The Wall Street Journal’s Jason Zweig tweeted this out over the weekend: The world is awash with smart people. Wise people, not so much. — Jason Zweig (@jasonzweigwsj) September 18,…

Resisting the urge to change course during inevitable periods of underperformance is one of the most difficult challenges investors face. Just as there is more than one way to skin…