Rules based investing with Methodical Investment's David Kaiser

Summary

Andrew Walker interviews David Kaiser of Methodical Investments about rules-based value investing. David explains his process, including profitability screens, quality-plus-discount selection, annual rebalancing, and risk controls. He discusses current sector tilts in consumer discretionary, energy, and industrials, while limiting financials and avoiding biotech and the absolute cheapest stocks. He remains convinced value will eventually work again as the market's FOMO-driven concentration unwinds.

• David Kaiser runs Methodical Investments as a rules-based, data-focused value firm.
• The strategy requires profitable companies and a balance of quality and discount.
• Current model tilts toward consumer discretionary, energy, and industrials; financials exposure is limited.
• Biotech is avoided due to binary drug/earnings risk; the very cheapest stocks are avoided as often cheap for a reason.
• Rebalancing is annual with quarterly profitability reviews to manage risk.
• Value has underperformed growth for years, but David expects a return to value as FOMO and expensive quality unwind.
• AI is not currently used, though David sees potential future applications and differentiation from staying old-school.
• Host and guest discuss melting ice cubes, governance traps, data integrity, and backtesting.