​Value investing fact and fiction - does cheap beat expensive?

Another superb piece has been published by the team at AQR Capital Management under the title“Fact,

Fiction and Value Investing ". It is designed as a complement to their excellent 2014 publication “Fact, Fiction and Momentum Investing" and does exactly what it says on the tin. Sadly, most academic finance papers are so dry even a cactus couldn't grow on them but, to their credit, AQR have a style that even a lay investor could (just about) get their head around. What I most enjoy about AQR's commentary is their commitment to debunking market myths and in this case they work hard to clear the mist surrounding value investing. I think the paper holds a lot of reinforcing lessons for Stockopedia subscribers… so I'll summarise a few key findings that are of most relevance. 1. Buying 'cheap' works

Investing successfully is really quite simple... though often not easy. We've long pushed the mantra that investors should focus on buying 'good, cheap, improving' companies - a philosophy based on the long term outperformance of quality, value and momentum as factors in...