If you're in a market-cap-weighted index, your stake in a company becomes larger when the stock price of that company goes up. Every time a stock is overpriced, the negative effect on your return is amplified because, not only is the price too high, but you own more of it. If a stock becomes underpriced, you own less of it. The more underpriced it is, the less of it you own.
Exactly. I do stock picking, concentrated, contrarian, long-term. But I usually recommend a equal-weighted index fund to people who don't wanna bother with research, don't have time or interest. $RSP for instance.
@@lorenzmuller3542 Equal weighted has really underperformed the S&P index though...last 5/10 years. Also, how often do you rebalance/buy/sell/exit your picked stocks? Seems like managing a hand picked selection of stock requires constant managing, being on top of all news/updates, exiting if there is a sudden bad news, tax mess....phew!
@@simrans3675 It should work out well with where the FANG valuations are at. I try to hold my positions as long as possible or sell once I see a better risk-reward elsewhere. I usually focus on small and micro cap cyclicals, so I try to hold them for a full cycle, maybe 5 years, sometimes longer. But the bad businesses you got to sell eventually. There is a ton of money to be made in energy services or mining for instance!
Read The little book thar beat the market, and will now buy the big secret for the small investor! Many thanks indeed for all you fascinating findings and work. Hi from Spain!
True. The part about market cap isn't necessarily true. For example his formula now recommends buying Apple as being in top 50 undervalued companies. :)
His funds are expensive, mgmt fees of around 1.35% per year. Not cheap and it eats up a large part of the advantage he supposedely thinks he providing through his system.
1:52 This is plowing the same field as if its new. This is what Peter Lynch wrote two books about around 20 years ago, Beating the Street and One up on Wall St., same idea.
Pure ignorance, two if the greatest best performing managers of all time with similar value sets are just frauds? Averaging 20%+ for over a decade made them rich. I know fund managers who hold Joel Greenblatt’s books higher than Benjamin Graham’s, so can’t really call them “children’s books.”
if hes such a great investor why is he not talking about businesses, and which businesses he likes. all he talks about is stocks and indices... "for the people" thats weird.
Forbes' smile makes babies cry...
This guy called Gamestop 10 years ago!
I was thinking the same thing
13:04 this interview (taken in 2011) will never get old.
Wonderful interview. Thank you Forbes for posting.
YA thanks for posting. forbes.
yeh been there tried and tested with manager won the mangerment 2 times yeah know all about it
Smart guy. Like his approach
Very interesting interview!
If you're in a market-cap-weighted index, your stake in a company becomes larger when the stock price of that company goes up. Every time a stock is overpriced, the negative effect on your return is amplified because, not only is the price too high, but you own more of it. If a stock becomes underpriced, you own less of it. The more underpriced it is, the less of it you own.
Exactly. I do stock picking, concentrated, contrarian, long-term. But I usually recommend a equal-weighted index fund to people who don't wanna bother with research, don't have time or interest. $RSP for instance.
@@lorenzmuller3542 Equal weighted has really underperformed the S&P index though...last 5/10 years. Also, how often do you rebalance/buy/sell/exit your picked stocks? Seems like managing a hand picked selection of stock requires constant managing, being on top of all news/updates, exiting if there is a sudden bad news, tax mess....phew!
@@simrans3675 It should work out well with where the FANG valuations are at. I try to hold my positions as long as possible or sell once I see a better risk-reward elsewhere. I usually focus on small and micro cap cyclicals, so I try to hold them for a full cycle, maybe 5 years, sometimes longer. But the bad businesses you got to sell eventually. There is a ton of money to be made in energy services or mining for instance!
@24:24 Most school don't teach Benjamin Graham....
Nice.
Right. That part also doesn't make sense to me.
Where is the Benjamin Graham article from 1978 in Forbes? Can't find it
Rob U Have you found it?
Read The little book thar beat the market, and will now buy the big secret for the small investor! Many thanks indeed for all you fascinating findings and work. Hi from Spain!
Yo, gimme your book, yo
INVESTORS WITH FORBES. That good. Thing to do
Word up
Steve you have a very interesting program, would be Very Good if you could speak a little louder, turn up the mic !
True. The part about market cap isn't necessarily true. For example his formula now recommends buying Apple as being in top 50 undervalued companies. :)
Sure would have liked owning that
Victor Östlund Yeah, wish he listened the that formula and bought apple huh. 400% return.
This has aged so badly...😂😂
Astonishing how stupid people are not to grasp the wisdom Joel is providing for free here.
13:04 Gamestop (GME) is still on your list 5 years later. It's funny he mentions that, because I think Gamestop is a classic example of a value trap.
@@analogeit You would still be good if you bought last year with that divi
Michael Burry bought in too, so who knows.
Oops
@@Bulbuzor lol
@@Mogwai88 Turns out value traps aren't a thing, they're just improperly valued (not that I would've figured this one out).
10:00 top stuff
i like your idea.,i like telecom counters
His funds are expensive, mgmt fees of around 1.35% per year. Not cheap and it eats up a large part of the advantage he supposedely thinks he providing through his system.
Charges too much in his fund" and Benjamin Graham did support the index only option"
Stonks only go up
gameeestopppp
steve is funny
Okay. And why his fund performed so badly?
Touche` 1992
BS is Bachelor of Science...
USA should keep it self away from this brutal act or same it will have destiny like USSR which also behave in this way
Thompson Amy Johnson Brenda Thompson Carol
Don't look like he has beat the 500 since this was published
Two Books....3 Books....More $$$$$
You got a problem with someone making money?
@@dogestranding5047 Yeah. That person needs to be me 😂
1:52 This is plowing the same field as if its new. This is what Peter Lynch wrote two books about around 20 years ago, Beating the Street and One up on Wall St., same idea.
why are billionaires writing what is basically childrens books related to investing ,and 3 of them nonetheless
James Ram How do you think they got to be rich? By never underestimating the ignorance of the public.
ya...
i dont tihnk they write them even ,someone else does it and puts their name and they make money
Pure ignorance, two if the greatest best performing managers of all time with similar value sets are just frauds? Averaging 20%+ for over a decade made them rich. I know fund managers who hold Joel Greenblatt’s books higher than Benjamin Graham’s, so can’t really call them “children’s books.”
weird interviewer
if hes such a great investor why is he not talking about businesses, and which businesses he likes. all he talks about is stocks and indices... "for the people" thats weird.
He isnt going to give away his secrets for free. He makes his money that way, you know. Pay him yo
Smart guy. Like his approach