The practical guide to finding value and opportunity in large-cap stocks using investor behavior
Large-Cap is an abbreviation of the term "large market capitalization" and refers to the stock of publicly traded companies with market capitalization values of roughly more than $10 billion, like Walmart, Microsoft, and Ford. Because of their size, the conventional view is that these companies do not present investors with an ability to be opportunistic. The Large-Cap Portfolio + Website argues that, contrary to popular perceptions, significant opportunities exist in these stocks.
Written with a fluency that both the savvy amateur and professional investor will understand, the book fills a void in the market by offering the practitioner a methodology to identify and approach the major assumptions that underlie valuation, with an emphasis on issues that are more relevant to the analysis of large-cap stocks.
Full of useful information on how to reap the rewards of stocks that most investors avoid
Presents essential insights into understanding stock valuation
Includes an actionable chapter devoted to portfolio management
Packed with timely instruction, Large-Cap Portfolio gives readers invaluable insights and examples of how to build portfolios that will out-perform broad market benchmarks.
Table of Contents
Part I: The Large-Cap Opportunity and Challenge
- Chapter 1: Trends in Large-Cap Investing and the Opportunities They Present
- Chapter 2: Risk and Uncertainty
Part II: Market Inefficiency
- Chapter 3: An Introduction to Market Efficiency
- Chapter 4: Evidence of Inefficiency in Investor Behavior and Market Behavior
- Chapter 5: Individual Decision Making
Chapter 6: Correlated Mistakes and the Failure of Arbitrage
- Herding and Why We’re Predisposed to Correlated Mistakes
- Evidence of Herding in Securities Markets and in the Analysis of Common Stocks
- Feedback Mechanisms and Mood Contagions
- Smart Arbitrageurs Will Save Us! Won’t They?
- Some Related Considerations in Approaching the Active Management of Investments
- Chapter 7: Conventional Views on Sources of Market Inefficiencies
Part III: Research and Portfolio Management
- Chapter 8: Identifying Large-Cap Stock Opportunities and Optimizing Research Processes
Chapter 9: Approaching Growth in Large-Cap Stock Research
- Are We Good at Predicting Growth?
- Equity Valuation Basics
- Limitations to Estimating Long-Term Growth Rates
- Abnormal Growth Magnitude and Abnormal Growth Duration
- Traditional Methods for Determining Growth
- Perversions of Growth Estimates in Large-Cap Stocks
- Recognizing that Markets Are Efficient over the Long Term: A Refresher on Microeconomic Theory
- Some Further Considerations When Predicting Growth Rates
- Chapter 10: Hewlett-Packard Company Case Study
- Chapter 11: The Challenges of Managing Large-Cap Common Stock Portfolios
- What’s on the Companion Website
- About the Author
- Title: The Large-Cap Portfolio, + Web site: Value Investing and the Hidden Opportunity in Big Company Stocks
- Release date: May 2012
- Publisher(s): Bloomberg Press
- ISBN: 9781118282755