=== SUMMARY ===
- The post argues that quantitative value investing (using metrics like P/E, P/B) is not a reliable predictor of short-to-medium term (<3 years) stock price movements.
- The author's thesis is that true value investing, in the spirit of Warren Buffett, requires a long-term horizon (5+ years) and conviction in the underlying business, rather than expecting quick profits from mean reversion.
- Quality assessment: This is a philosophical discussion about investment strategy, not specific due diligence (DD). It's a conceptual reminder or "noise" from a trading perspective, as it offers no specific analysis of any company or asset.
=== SENTIMENT ===
NEUTRAL
=== TRADE IDEAS ===
No actionable trade ideas in this post.
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▶ Полный текст поста
Quantitative 'value investing' (as a CAPM/Farma 'value' factor, i.e. mostly looking at P/E, Book/market, CAPE etc) is not statistically significant for predicting short-medium term (<3years) price changes.
When you are betting on a stock because it's quantitatively 'cheap', you are betting on a mean-reversion. You are a contrarian, as opposed to Momentum factor investing, which is trend-following (and predictive for <12 month price changes).
You cannot look into a company's trailing financials and expect to find any sort of 'edge' that will predict < 3 years price movements. And if we want to stick to Buffett: he emphasises that his "favourite holding period is forever". If you follow his philosophy for value investing, the mindset for a minimum investment horizon should really be 5+ years.
All this is to say that: if you are buying a stock and expect short-term profits, freak out when stock goes down, don't have confidence in the company for 5+ years etc.: you are not properly value investing.