Not bad numbers, but driven by 2024: https://testfol.io/?s=3caOqt3oM8h
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As usual all Factors work (on paper) 
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Till they donât. There is only sufficient evidence for size and value, but even those 2 seem to get lost in statistical noise lately.
There is tons of statisical evidence for more. Especially profitability, that also has done terrific the last decade.
And known for a while, 2018 article on it for example: The Profitability Factor: International Evidence -
The below is a profound realisation known to anyone who sold anything, ever, in human history. Iâd print and frame it with âEconomists discovering gravityâ as a captionâŠ
âŠafter all, according to Ben Graham, âIn the short run, the market is a voting machine but in the long run, it is a weighing machine.â
P.S. Yes, I know itâs not that naive, I am just being myself for lulz!
P.S.2 Weight, gravity, you get it? 
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Why is it a surprise that company which makes profit is a good investment versus the one which doesnât ?
Itâs not surprising to me, but to economists in the link 
Because it could be priced in (but is not, according to contemporary research). A highly profitable company could have very high multiples. Sure it returns 20% on equity per year, but you also pay 100x its present earnings. Who knows if it will still be so profitable at the end of this decade?
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Intellectually, a Profitability Factor just canât work. High profitability means relatively high valuation. You will break even if the company manages to maintain its high profitability for a longer period of time onl. If that happens, you enjoy superior returns.
But if the profitability after 5-10 years already drops to a ânormalâ one, you donât make a superior return as the valuation drops. So you need companies that remain super profitable for a very long time.
The thing is: economics 101 dictates that highly profitable markets attract new market entrants that squeeze profit down to risk adjusted returns.
What does this mean? There are two kinds of super profitable companies - the ones with very high long tail risks, that can wipe you out at any time⊠or monopolies (including platform businesses).
So you shall not look for profitability but monopolies and platform businesses that have a unique position where the can evade anti-trust regulations.
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Its actually interesting that only 4% of the best-performing stocks account for the entire gains of US markets since 1926. The remaining stocks just matched the returns of treasury bills. (Source)
For investors, this means either accepting that it is difficult to find the âbestâ stocks and just invest in the market and be diversified. On the other hand, those investors that find those companies can experience exceptional gains. Evidence has shown that the latter is very difficult.
I guess thats what âmoatâ investing is, finding a competitive advantage. Interesting podcast from the norwegian sovereign fund with Sir Chris Hohn as a guest, who looks to find such companies and allocates a significant amount of the investment profits to charitable causes (focus on children).
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Yes, indeed interesting. I remember having read an UBS paper this year with long-term statistics (>100 years) about different factors. They all work somehow and they all have very long periods that they donât work. Those periods were shortest in the momentum factor which was the overall winner.
Personally I use a combination of momentum, value and carry. But then I FIREd already 11 years ago, so my situation is probably not like most others. Half of my money (it used to be 80%) is in a boring dividend strategy with the target of low volatility and high income. The other half in a high risk momentum/growth strategy. Both are completely mechanical to avoid behavioral risk. The risk paid out well, this year it overtook my dividend strategy in value, compounding in action.
I try to do a monthly update on my investments here:
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Okay. Now the largest war in Middle East involves US, Iran & Israel.
Sorry for bad news.
Tomorrow the markets will make their vote on this decision
Monday, red. Friday, green.
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Markets pretty meh about the whole thing so far.
Basically in summary market is assuming that team with the biggest gun can do whatever they want and it would be alright for that team. Since most of the world market cap is in Developed world, so far not much impact.
If Iran & Israel keep fighting, nothing is changing for others. So no impact for rest of the world.
If Iran will block chokepoint of global trade, US & NATO will bomb Iran to fix that. So again, no impact.
â-/
In this whole episode one thing became clear. There is nothing called âinternational lawâ. Itâs basically who has the biggest military call the shots. Be it Russia or US. Everything else is for dramatisation purposes.
Maybe China will also do whatever they like at some point and no one can stop them. That event would be interest from markets perspective because there the EM countries (China / Taiwan) will trigger an event which will impact the DM countries.
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santa claus for adults
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âThe beatings will continue until morale improvesâ - for peace.
Has it ever been different in human history? Or even prehistoryâŠ
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Well ⊠what can I say.
Market pumping one day before payday xD