Abstract
Value investing is about buying stocks with strong fundamentals at a low price and selling the stocks when the ratio gets high. The authors comprehensively review this theoretical foundation and empirical evidence, pointing out the potential strategic use of the price-to-earnings ratio, book-to-market ratio, dividend yield, price-to-cash flow ratio, and EV-to-EBITDA ratio, explaining the value premium by pointing to non-market risks, behavioral mispricing, survivorship bias or data mining.
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Zaremba, A., Shemer, J. (2017). Value Versus Growth: Is Buying Cheap Always a Bargain?. In: Country Asset Allocation. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-59191-3_2
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DOI: https://doi.org/10.1057/978-1-137-59191-3_2
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