How to Choose What to Exclude From Your Portfolio

Large cap US equity has really been the dominant asset class for long equity and in passive investment strategy. And our approach was, why do you have to buy them all? If you can get a subset of that by simply excluding the bad companies, or in our case, we call them the losers, then you could probably do better. We looked at this and studied it and tried to come up with a number of different factors that would help us in a quantitative way figure out how to exclude those so-called companies.