Investment Fables: Tall Tales about Stocks xxv
Chapter 1 Introduction 1
The Power of the Story 1
Categorizing Investment Stories 2
Deconstructing an Investment Story 9
Conclusion 16
Chapter 2 High Dividend Stocks: Bonds with Price Appreciation? 17
Core of the Story 18
Theoretical Roots: Dividends and Value 19
Looking at the Evidence 23
Crunching the Numbers 30
The Rest of the Story 35
Lessons for Investors 50
Conclusion 51
Chapter 3 This Stock is So Cheap! The Low Price-Earnings Story 57
Core of the Story 58
Theoretical Roots: Determinants of Pe Ratio 59
Looking at the Evidence 66
Crunching the Numbers 70
More to the Story 77
Lessons for Investors 88
Conclusion 91
Endnotes 91
Chapter 4 Less than Book Value? What a Bargain! 95
The Core of the Story 96
Theoretical Roots Theory: Price to Book Ratios and Fundamentals 97
Looking at the Evidence 103
Evidence from the United States 103
Crunching the Numbers 107
More to the Story 112
Lessons for Investors 121
Conclusion 122
Chapter 5 Stable Earnings, Better Investment? 127
Core of the Story 128
Measurement of Earnings Stability 129
Theoretical Roots: Earnings Stability and Value 131
Looking at the Evidence 133
Crunching the Numbers 145
More to the Story 151
Lessons for Investors 158
Conclusion 159
Chapter 6 In Search of Excellence: Are Good Companies Good Investments? 163
Core of the Story 164
What Is a Good Company? 165
The Theory: Building Quality into Value 170
Looking at the Evidence 174
Crunching the Numbers 180
More to the Story 187
Lessons for Investors 190
Conclusion 192
Endnotes 193
Chapter 7 Grow, Baby, Grow!: The Growth Story 197
The Core of the Story 198
The Theory: Growth and Value 199
Looking at the Evidence 204
Crunching the Numbers 212
More to the Story 219
Lessons for Investors 228
Conclusion 229
Chapter 8 The Worst Is Behind You: The Contrarian Story 233
The Core of the Story 234
Theoretical Roots: The Contrarian Story 235
Looking at the Evidence 240
Crunching the Numbers 247
More to the Story 251
Lessons for Investors 258
Conclusion 259
Endnotes 260
Chapter 9 The Next Big Thing: New Businesses and Young Companies 263
Core of the Story 264
Theoretical Roots: Risk and Potential Growth 265
Looking at the Evidence 270
Crunching the Numbers 283
More to the Story 292
Lessons for Investors 304
Conclusion 307
Endnotes 308
Appendix Small-Cap Companies That are Lightly Followed: January 2003 310
Chapter 10 Mergers and Returns: The Acquisitive Company 311
Core of the Story 312
Theoretical Roots: Acquisitions and Value 315
Looking at the Evidence 321
Crunching the Numbers 328
More to the Story 336
Lessons for Investors 344
Conclusion 346
Endnotes 347
Appendix Potential Takeover Targets Among US Companies--March 2003 350
Chapter 11 A Sure Thing: No Risk and Sure Profits 353
Core of the Story 354
Theoretical Roots of Arbitrage 355
Looking at the Evidence 363
Crunching the Numbers 373
More to the Story 379
Lessons for Investors 385
Conclusion 387
Endnotes 388
Chapter 12 It's All Upside: The Momentum Story 391
The Core of the Story 392
Theoretical Roots of Momentum Investing 393
Looking for the Evidence 397
Crunching the Numbers 409
More to the Story 421
Lessons for Investors 426
Conclusion 429
Endnotes 430
Chapter 13 Follow the Experts 435
The Core of the Story 436
Theoretical Roots: The Value of Expert Opinion 437
Looking at the Evidence 439
Crunching the Numbers 455
More to the Story 463
Lessons for Investors 467
Conclusion 469
Chapter 14 In the Long Term... Myths About Markets 475
Core of the Story 476
Theoretical Roots: Market Timing 477
Looking at the Evidence 479
More to the Story 505
Lessons for Investors 513
Conclusion 515
Chapter 15 Ten Lessons for Investors 519
Lesson 1 The more things change, the more they stay the same 519
Lesson 2 If you want guarantees, don't invest in stocks 520
Lesson 3 No pain, no gain 520
Lesson 4 Remember the fundamentals 520
Lesson 5 Most stocks that look cheap are cheap for a reason 521
Lesson 6 Everything has a price 521
Lesson 7 Numbers can be deceptive 522
Lesson 8 Respect the market 523
Lesson 9 Know yourself 523
Lesson 10 Luck overwhelms skill (at least in the short term) 524
Conclusion 525
Index 527