Craving Alpha

Mar 20, 2021

5 min read

Practitioner’s Take on Value Investing

Photo by Andre Taissin on Unsplash

What is Value Investing!

What’s Changed?

  1. Low PE — Usually a PE of close to 20x implies an earnings yield of 5%
  2. High Dividend Payout — Usually a high payout aims at putting money in the hands of the shareholders, which gives the stock a bond-like cashflow feature.
  3. A high long term average ROE

A Risk Premium Equation Perspective

Past Returns

Where does Value Investing still work?

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