We Study Billionaires - The Investor’s Podcast Network TIP269: Factor Based Investing w/ Jack Vogel (Business Podcast)
Nov 17, 2019
In this conversation with Jack Vogel, CIO and CFO at Alpha Architect, a powerhouse in factor-based investing, listeners dive into the mechanics of factor investing and its historical performance. Vogel discusses how factors perform in bear markets and whether to invest in single or multiple factors simultaneously. Additionally, he shares insights on using the Relative Strength Indicator and examines the evolving role of Bitcoin in finance. This insightful talk combines investment strategies with behavioral insights, making it a must-listen for aspiring investors.
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Factor Investing Defined
- Factor investing systematically applies active investment strategies.
- It differs from simply buying a market-cap-weighted index by focusing on specific factors like value or momentum.
Key Factors
- Value and momentum are the two most impactful factors in investing, shown to work across various markets and asset classes.
- Other factors like quality, profitability, investment, and low volatility also exist but are less impactful.
Price-to-Book Relevance
- The price-to-book ratio's relevance has declined since 2007, potentially due to intangibles and share buyback accounting rules.
- Consider alternative value metrics like enterprise multiples, which account for debt and cash, unlike price-to-earnings.
