Invest Like the Best
James O'Shaughnessy
 Invest Like The Best praises a similar investment approach to that of
What Works On Wall
Street: that is an investor is best using a mechanical and unemotional investment strategy.
O'Shaughnessy explains that the determinants of a portfolio returns are its main
factors (Market Capitalization, Valuation, Growth Rates, Relative Strength,...) rather
than its specific
stocks holding
That is 2 portfolios with similar Market Capitalization, PE, Growth, Relative Strength... will have similar returns over time even though they contain different stocks.
The book then shows how to analyze successful Gurus' Portfolios to extract their
main factors so that you can build a stock screening that mimic their
strategy.
Provided your portfolio exhibits similar factors to that of your favorite
gurus or Mutual Fund managers, your performances shall more or less match theirs over time.
The book features many different successful Fund Managers and Gurus to
give you a broad choice of strategies.
What is missing in the Book is the Selling part. You may use the following guidelines to choose an appropriate
holding period.
Identify the primary theme (see Stock Screening):
- If the primary theme
is Value or Growth At Reasonable Price GARP, it
should have holding period ≥ 1 year.
- If it is Growth/Momentum, it should have holding period ≤ 1 year.
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