The Moneyball Of Quality Investing by Vitali Kalesnik & Engin Kose, Research Affiliates
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Factor investing has rightfully gained adherents among investors seeking superior risk-adjusted returns. Our research reveals that quality is not a factor that reliably commands a premium in its own right. Nonetheless, value investing conditioned upon certain indicators of company quality is a promising strategy.
In 2000, Mike Hampton, a star pitcher, signed the largest contract in sports history up to the time. The compensation was $121 million over eight years. As it turned out, however, Hampton had only one truly successful year out of the eight. He was a great ballplayer, but he was not worth...
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