@Irnest
Very interesting - thanks Sean - you uncovered a lot of hiccups with the value ETFs. Loved the 4 quadrants!
@rosscwilding
2:00 Instructive that all three index providers use the price-to-book value (BV) As Sean highlights, the problem is that they fail to consider what BV comprises of 🤔 This leads to several problems. Firstly, BV can lead to over-representation of companies from capital-intensive industries, such as shipping (Carnival). Secondly, reliance on BV means missing out on companies that generate huge economic value from intangible assets, for example, Microsoft or Apple. Thirdly, it often relies upon recorded historical cost, which can understate the true value - especially in times of inflation, such as today. Finally, Passive Value providers don't screen out value traps, i.e. shares which are cheap for a reason, such as slow growth, marginal profitability, high leverage, etc. Buying cheap shares is always a winning strategy. But overreliance on a simple metric, like P/BV, can be misleading. Instead, investors are better off with Active Value, as employed by the Ranmore Global Equity fund.
@yonimanbre
Great content Sean, looking forward to see more videos like this one.
@dereksouthey6766
Thank you Sean. Enjoying your series, filling lots of gaps in my thinking.
@jono4944
Hi Sean, I thought that traditionally Price to Book within value factor construction excludes intangibles (which goodwill would be apart of that is included in this video as distorting book value). From my understanding this is one of the common criticisms of P/B as a value measure....and that's why measures including intangibles are now used more
@claudiasass
Thank You - loved it and learnt too
@freddiedarwin4836
✋ Promo-SM!!!
@Dillon123456123