Philosophy	Beliefs about Markets/Characteristics of Successful Investors	Strategies
Passive Diversification Index Funds	Belief: Markets are efficient; even if they are inefficient, the cost of exploiting the inefficiency > returns. Characteristics: Willingness to accept market returns.	Indexing to broadest possible indices
Passive Value Investing Ben Graham John Neff Warren Buffett	Belief: Markets systematically undervalue firms with identifiable characteristics. Characteristics: (1) Screens that work (2) Long time horizon (3) Consistency (rather than high rankings) (4) Low turnover and transactions costs	Low PE High dividend yield (Dow Dogs) Low PBV (w/ High ROE) Low PS Low Price/Replacement Value Undervalued stocks relative to a model that uses public information (DDM, EVA..)
Activist Value Investing The Lens Fund Michael Price	Belief: Value can be created by taking positions in poorly run companies and pushing for changes in policy or management. Characteristics: (1) Sufficient Capital to take large positions (2) Willingness to have non-diversified portfolio (3) Knowledge of company?s business (4) Understanding of corporate finance (5) Willingness to confront management	Poor stock price performance Low return on assets/equity Low leverage Large cash balances Low institutional holdings/ Underfollowed securities.
Contrarian Value Investing Michael Price	Belief: Markets overreact to bad news about a company by pushing prices below true value. Characteristics: (1) Strong stomach (2) Willingness to accept short term losses (3) Capacity to ride out bad news (4) Clients who believe	Buy losers Buy companies with valuable assets after cumulative bad news Buy high yield securities in companies where default risk is overestimated. Low institutional holdings/ Underfollowed securities.
Passive Growth Investing Peter Lynch T. Rowe Price	Belief: Markets sytematically undervalue growth in some companies with identifiable characteristics. Characteristics: (1) Good at estimating future growth (2) Capacity to price growth (3) Willingness to accept volatility/risk (4) Lower turnover/transactions costs	Low PE/growth rate companies Buy companies where PE< growth Small cap investing Earnings Momentum Models Emerging Market Investing (where investing is just based on growth of economies)
Activist Growth Investing	Belief: Invest in growth businesses (which are constrained when it comes to exploiting growth - internally or externally) and try to ease the constraints. Characteristics: (1) Understanding of business (2) Good at assessing management quality (3) Willingness to take risk (4) Willingness to accept undiversified portfolio.	Venture capital investing Private Equity
Information Trading	Belief: Markets make mistakes when reacting to information that can be exploited using observable variables. Characteristics: (1) Good sources of information (2) Capacity to trade quickly (3) Low transactions costs	Trading after significant Earnings or Dividend Announcements Risk Arbitrage (buying target company stock after the announcement of a takeover) Tracking insider trading
Arbitrage Long Term Capital: Merriweather	Belief: Markets make errors in pricing similar assets. Characteristics: (1) Good pricing models (2) Technical expertise at pricing (3) Access to market prices (4) Capacity to trade quickly (5) Low transactions costs.	Index Arbitrage Futures Arbitrage Options Arbitrage
Reversal Investing (Short term contrarian) Zweig	Belief: Markets tend to correct themselves; if prices have gone up (down) quickly, they will tend to go down (up). If investors are too bullish (bearish), stocks are more likely to go down (up). Characteristics: (1) Short time horizons (2) Good indicators of current market mood (3) Willingness to hold unpopular investments	Odd lot rules Mutual fund cash positions Specialist short sales Investment advisory opinion
Momentum Investing Acampora (?)	Belief: Markets tend to stay in trends: if prices have gone up (down) quickly, they will tend to keep going up (down). Characteristics: (1) Timely indicators of price momentum (2) Short time horizons (3) Know when to sell (4) Speedy execution	Relative Strength Charting patterns
Market Timing Soros Paul Tudor Jones	Belief: It is possible using identified variables to forecast the direction of markets (i.e. to time markets). Characteristics: (1) Good & Timely market timing models/indicators (2) Know when to sell (3) Willingness to make large bets (in either direction)	Tactical Asset Allocation Sector Rotation (sector to sector based on macroeconomic or market forecasts). Hedge funds (selling overvalued and buying undervalued asset classes)