Wednesday, July 1, 2009

First Post

This blog is a record of my observations of the low P/E, high-yield part of the American stock universe: the Low P/E Bin. The overall thrust is Dremanesque, which differentiates it from the more typical Buffettite value-stock blog. I'll be posting a daily roundup of the low P/E Bin set, and there'll be regular comment on particular stocks. There'll also be posts on cognitive biases, and off-topic posts every now and then.

Low P/E investing, I admit, is not as glamorous as other kinds of value investing. It also doesn't have the augustness of the old-style Ben Graham approach. It does, however, have a close link with behavioral finance thanks largely to Mr. Dreman's sponsorship. Behavioral finance is post-MPT, not pre-MPT like so many other approaches. So, while low-P/E investing doesn't have the prestige or lineage of other value investing strategies, it has the advantage of being with the new in finance studies.

I have eight mock funds over at Marketocracy. All but one are devoted to the low P/E strategy. Of these, one is actively managed; the other six are statistical funds for trying out different sub-strategies. The outlier is a fund based upon the Dogs of the Dow strategy: it's used to track the actively managed mock fund I run.

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