In the last part (part 9) of Brendan Byrnes' interview with Wesley Gray, author of Quantitative Value, Gray shares his most surprising finding: that price trumps everything as a predictor of future stock performance. In his research, he found that weighting price and quality equally results in overpaying. Therefore, he recommends choosing the best of the cheap stocks for your portfolio. He supports this claim by stating that, historically, a high-quality, high P/E stock will outperform a low-quality, high P/E stock, but a junky stock with a lower P/E will do even better. Benjamin Graham was right -- and Warren Buffett, with his success investing in marquee names such as Coca-Cola, is just an anomaly. Cigar butts are the way to go.
In this interview, Wesley Gray discusses his new book, "Quantitative Value."
About the Author
Brendan Byrnes is the Managing Director of Motley Fool Money, where he oversees business strategy and editorial operations. Since joining The Motley Fool in 2011, he has written hundreds of articles, provided market and investing analysis, and appeared on CNBC and FOX. Earlier in his career at The Motley Fool, Brendan interviewed leading executives and thought leaders across the investing and business landscape. He holds a degree in Finance from Virginia Tech.