Buch, Englisch, 304 Seiten, + Website, Format (B × H): 163 mm x 231 mm, Gewicht: 544 g
Reihe: Bloomberg Professional
Value Investing and the Hidden Opportunity in Big Company Stocks
Buch, Englisch, 304 Seiten, + Website, Format (B × H): 163 mm x 231 mm, Gewicht: 544 g
Reihe: Bloomberg Professional
ISBN: 978-1-118-25660-2
Verlag: Wiley
The practical guide to finding value and opportunity in large-cap stocks using investor behavior
Large-Cap is an abbreviation of the term "large market capitalization" and refers to the stock of publicly traded companies with market capitalization values of roughly more than $10 billion, like Walmart, Microsoft, and Ford. Because of their size, the conventional view is that these companies do not present investors with an ability to be opportunistic. The Large-Cap Portfolio + Website argues that, contrary to popular perceptions, significant opportunities exist in these stocks.
Written with a fluency that both the savvy amateur and professional investor will understand, the book fills a void in the market by offering the practitioner a methodology to identify and approach the major assumptions that underlie valuation, with an emphasis on issues that are more relevant to the analysis of large-cap stocks.
* Full of useful information on how to reap the rewards of stocks that most investors avoid
* Presents essential insights into understanding stock valuation
* Includes an actionable chapter devoted to portfolio management
Packed with timely instruction, Large-Cap Portfolio gives readers invaluable insights and examples of how to build portfolios that will out-perform broad market benchmarks.
Autoren/Hrsg.
Fachgebiete
- Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Internationale Finanzmärkte
- Wirtschaftswissenschaften Volkswirtschaftslehre Internationale Wirtschaft Internationale Finanzmärkte
- Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Börse, Rohstoffe
- Wirtschaftswissenschaften Betriebswirtschaft Unternehmensfinanzen Finanzierung, Investition, Leasing
- Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Anlagen & Wertpapiere
Weitere Infos & Material
Acknowledgments xi
Preface xiii
PART I: THE LARGE-CAP OPPORTUNITY AND CHALLENGE
CHAPTER 1 Trends in Large-Cap Investing and the Opportunities They Present 3
Defi ning a Large-Cap Stock 4
Understanding the S&P 500 Index 8
Examining the Growth of Indexed Equities 10
Defi ning Active Management 13
So What Does This Mean for Investors? 25
Two Additional Considerations 28
Finally, Something Timely 29
Conclusions 31
Notes 31
CHAPTER 2 Risk and Uncertainty 35
Financial Measures of Risk 37
Accounting Measures of Risk 41
Differentiating between Certain and Uncertain Cash Flows 43
Conclusions 48
Notes 49
PART II: MARKET INEFFICIENCY
CHAPTER 3 An Introduction to Market Efficiency 53
The Basis for Market Effi ciency 55
Effi cient Markets Hypothesis 58
Empirical Support for the Efficiency of Markets 59
Conclusions 60
Notes 61
CHAPTER 4 Evidence of Ineffi ciency in Investor Behavior and Market Behavior 63
Closed-End Fund Discounts and Premiums 64
Market Bubbles and Market Crashes 68
Investors vs. Their Investment. or Investors vs. Themselves 73
Book-to-Market Effects and Other Value Criteria 76
Conclusions 78
Notes 79
CHAPTER 5 Individual Decision Making 81
That Thing about Our Being Rational. 84
Bayesian, Non-Bayesian--What Does This Mean? 87
Great Companies Always Make Great Stocks 90
Representative Sequences 93
Now That You Put It That Way. 96
Dropping an Anchor in a Sea of Information 105
Conclusions 110
Appendix: Utility Theory and Prospect Theory 112
Notes 116
CHAPTER 6 Correlated Mistakes and the Failure of Arbitrage 119
Herding and Why We're Predisposed to Correlated Mistakes 120
Evidence of Herding in Securities Markets and in the Analysis of Common Stocks 123
Feedback Mechanisms and Mood Contagions 126
Smart Arbitrageurs Will Save Us! Won't They? 129
Some Related Considerations in Approaching the Active Management of Investments 133
Conclusions 135
Notes 136
CHAPTER 7 Conventional Views on Sources of Market Inefficiencies 139
Structural Impediments to Market Effi ciency 143
Pertinence to Large-Cap Universe 150
Conclusions 154
Appendix: Underexplained Market Phenomena 155
Notes 158
PART III: RESEARCH AND PORTFOLIO MANAGEMENT
CHAPTER 8 Identifying Large-Cap Stock Opportunities and Optimizing Research Processes 163
Identifying Large-Cap Stock Opportunities 164
Filters and Relative Assessments of Value 165
Subjective Identifi cation of Overoptimism and Overpessimism 173
Overconfi dence, Information Overload, and the Structure of Investment Firms 177
Conclusions 180
Notes 181
CHAPTER 9 Approaching Growth in Large-Cap Stock Research 183
Are We Good at Predicting Growth? 185
Equity Valuation Basics 187
Limitations to Estimating Long-Term Growth Rates 190
Abnormal Growth Magnitude and Abnormal Growth Duration 190
Traditional Methods for Determining Growth 196
Perversions of Growth Estimates in Large-Cap Stocks 199
Recognizing that Markets Are Effi cient over the
Long Term: A Refresher on Microeconomic Theory 214
Some Further Considerations When Predicting Growth Rates 227
Solutions 228
Conclusions 231
Notes 233
CHAPTER 10 Hewlett-Packard Company Case Study 235
A Look at HPQ's Historical Performance and Operations 236
Behavioral Biases and Evidence of Analyst Overreaction 241
Evaluating the Market's Assessment of HPQ's Growth Prospects 243
Pulling It All Together 251
Appendix: Calculating Underlying Assumptions
Relevant to the Valuation of HPQ 253
Notes 258
CHAPTER 11 The Challenges of Managing Large-Cap Common Stock Portfolios 259
Understand Your Universe and Benchmark 260
Off-Benchmark Securities 264
Position Sizes 269
Turnover 271
Commodity-Oriented Holdings in the Large-Cap Portfolio 272
Macroeconomics and Portfolio Management 276
Conclusions 279
Notes 280
What's on the Companion Website 281
About the Author 282
Index 283
