Jim O’Shaughnessy: “What Works on Wall Street”

What it takes to be a successful active investor. Hint, it’s much harder than you think.


Jim O’Shaughnessy: “What Works on Wall Street”



Contrast active and passive equity investing. Risk/rewards.

Conclusion—Investors who do not have the following traits and emotional quality should index their portfolios. I find they are the majority of investors today. Also discussion of points of failure for passive and active investors.

What traits and emotional characteristics are required to succeed as an active investor?

Successful active investors generally ignore forecasts and predictions.

Successful active investors are patient and persistent.

Successful active investors have a strong mental attitude.

Successful investors are made, not born. Discussion of how successful active investors have a mental attitude bordering on stoicism; how they control how they interpret the world.

Long-term data uncovered by What Works on Wall Street that you can use to guide your investment strategy.

The importance of value; momentum; financial strength and earnings quality in putting together your portfolio.

A highlight of stocks with high versus low shareholder yield (Cash dividend %+Bet Buyback %); it’s efficacy since the 1920s

What NOT to own, lottery stocks versus the market.

The importance of a stock’s market capitalization—the most profitable stocks come from the smallest part of the market (Micro cap stocks)

Putting it all together—should you be an active or passive investor?

Weight of the evidence for passive and active investing

Which type of investor are you? Getting the best out of the style you choose.

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