Is Your Value Fund Just Smoke And Mirrors?

Ted

FYI: Harry Houdini is perhaps the best-known magician of all time, gaining notoriety in the early 20th century through his daring escape acts. Houdini escaped from straight jackets while suspended from chains, fought his way out of submerged mailbags, and performed a “buried alive” stunt.


Crowds loved it.

Of course, these tricks were merely sophisticated illusions–seemingly supernatural feats accomplished through sleight of hand or the use of fake equipment. Houdini’s genius was in pulling off an impossible trick in a way that did not betray his secrets. He was a master showman and a king of the stage. So what does all this have to do with value investing? Well, we wanted to ask an important question.
Regards,
Ted
https://www.equities.com/news/is-your-value-fund-just-smoke-and-mirrors

Charles

Thanks Ted. Really good post by our friend Dr. Wesley Gray. Sure hope he's right!

Originally on Alpha Architect site ...

http://blog.alphaarchitect.com/2016/06/01/want-to-spot-a-real-value-investor-look-for-horrible-recent-performance/#gs.TUuAuxE

Closet-indexing is a great way to achieve asset collection, and accommodate scale, when mixed with powerful marketing and confused buyers. But unfortunately, 1) closet-indexing funds are not exploiting the documented anomaly they intend to exploit and 2) they are really just noisy reincarnations of a product that is already available in the market at extraordinarily low-costs — passive index funds!

Plan to have an update on QVAL from Alpha Architect and SYLD from Cambria Funds in July commentary.

expatsp

I think TDVFX, which I found thanks to David Snowball's writeup here, qualifies as deep value.