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Professor Robert Novy-Marx: The Other Side of Value (EP.149)

The Rational Reminder Podcast

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Navigating Profitability and Momentum in Investing

This chapter explores the complexities of capturing profitability premiums through diversified and concentrated factor exposures, emphasizing the risks and implications on performance ratios. It discusses the persistent value premium, the dynamics of price and fundamental momentum, and critiques the reliance on historical data for predicting stock performance. Furthermore, the chapter highlights the challenges of implementing momentum strategies, including transaction costs and market volatility, urging a more realistic approach to investing.

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