Although Preston and Stig are hardcore value investors, sometimes it’s important for individuals to challenge their beliefs. As a result, TIP has invited leading expert Dr. Wesley Gray onto the show to discuss the concept of momentum investing. Although growth investing is a common term for many individuals in finance, momentum investing is less understood. The difference between the two approaches is that growth is primarily based on a company’s exploding fundamentals. For example, if the revenue is growing at a rapid pace and the company has prospects for further expansion, then the business might fit into the classical definition. This is different from momentum because the only variable considered is price of the security. Now, this might seem like there’s something missing from the description, but there is no mistake. The only thing that’s considered with momentum investing is the price.
Through research and much back testing, Dr. Gray has found that a hybrid approach of momentum investing and value investing has provided the most comprehensive returns. To learn more about this unique and mysterious way of investing capital be sure to check out our interview with Dr. Gray.
In this episode, you’ll learn:
- Why momentum investing is not the same as growth investing
- Why value investor should consider a momentum strategy in their portfolio
- Why investing is like poker, where the best players win over time
- Ask the investors: What do you look for in a 10K?
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BOOKS AND RESOURCES
Dr. Wesley Gray’s website: Alpha Architect
Dr. Wesley Gray’s book: Quantitative Momentum – Read Reviews for this book
Dr. Wesley Gray’s book: Quantitative Value – Read Reviews for this book
Dr. Wesley Gray’s Twitter