YouSaid · the spoken record

Wesley Gray

lines on the record: 77
first: 2016-06-24
most recent: 2016-06-24
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“I wrote down the big three, which have been endowed upon me by a lot of our investors who are all insanely rich. And I'm like, wow, that's pretty cool. How do you guys do that? And there's literally three themes that come out of every single one of these stories. Minimize tax burdens Defer, defer, defer, have horizon, and live below your means. So always be humble, you know, never rise to the level of what you can afford. Just, you know, live within your means and enjoy your life with what you got. And those are the three things. And you'll be all right.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I would say just get mentally tough. It doesn't even matter what you learn. Get mentally tough and know how to adapt and overcome. And then the other thing I said here, I just write down my notes is, you know, I become either a robot salesman or a robot manufacturer because I feel like in the very near future, robots are taken over. And so you might as well adapt and train to the future and not, you know, be a basket weaver guy anymore because it's not going to pay.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Unbeliev So back to our discussion about manual labor. I would say first get mentally tough. So do sports, do things that are painful that allow you to be tough, adapt because we're in a world where it's going to change. It's going to be tough. It's going to be adapting. And you're competing not with Americans. You're competing with the globe now. So, you know, we have a lot of, you know, my old students or Chinese guys. And these guys grind. They work harder, faster, stronger. And that's who you're competing with out there. So unless you're...”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“After Renaki's stuff, it just made me rethink the whole world of like human thinking and decision making from the perspective of like a marketing person and how you get influenced and bombarded every day in subconscious ways to do things you may or may not want to do, but it's very important, I think, to be aware of this influence tactics out there. So one you can defend against it. And then two, you can use it to your advantage in a sensible high integrity way.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And guess what? None of these political folks appeal to the pragmatic part. You always get the extremes because that's what sells well. That's what I'm, yeah. Give me one more book. The other one, a whole bunch of them is Chaldini's books on the science of persuasion. Influence. Influence 50 scientific ways to say yes.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And Yeah, yeah. And that's my big. I mean, I'm going to be a Gary Johnson voter out of Libertarian. He was the one who was booed when he said, yes, you should have. Because he's a pragmatic libertarian. That's a substance.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Helps me get better. So you're reading more academic papers. Yeah, I read a lot of journals for books. Some of the things that heavily influenced the way I've thought about things, and I know you know it very well, like Dan Conneman's book, Fastest Slow, Epic. Another one is Thaler Sustine, that nudge book. The whole idea of like libertarian paternalism. I thought made a ton of sense because I used to be a libertarian and I was like, wait a second, there's humans involved and they make bad decisions.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say not much beyond that. Like Graham taught me about thinking about businesses or stocks as businesses. Buffett actually didn't add anything onto that, but I just like his transparent approach and the whole idea that integrity is everything. And in any end, that's what you live and die by. And he has that old quote where, you know, integrity spends a lifetime to build five minutes to destroy, which that has nothing to do with investing, but it has everything to do with investing.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, cost and taxes, if you can minimize those somehow, that is always the answer. Now, even they talk about like active. Active is only bad to the extent that the cost of achieving it, the net benefit is not positive. It's negative because it goes in taxes and fees to some idiot.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, I'd say to answer directly like the quants that I admire, obviously, Cliff Asmus, I like a lot. He does value momentum. AQR is a great firm. Booth at JFA is great. They figured out how to capture small value premium. And I think probably the most under-respected or underappreciated quant is Jack Bogle at Vanguard because indexing is a form of systematic quant investing. It's just you're systematically buying these market cap weighted passive indices. And for all intents and purposes, he is a quantitative, systematic investor. And clearly that's done a world of good for society and investors.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's all about what is the signal, what is the noise. The signal is driven from the humans involved in the game and the dynamics and the rules of the game they play and how that shapes their incentives. That doesn't change no matter what. I don't care about GDP, what the Fed says, because it's irrelevant. Human behavior stay in the same and human incentives are staying the same in the institutional construct that we currently live in, which is primarily driven by a lot of delegated asset management.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, yeah, one of my old bosses, Chris Gates, wrote the paper's longest back test. They get data back to 1800, and he actually explicitly says in the abstract, momentum factor has underperformed for 10-year cycles like seven times.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it doesn't mean it's not easy to exploit, right? Because momentum is a great example. Momentum is underperformed as a long short factor for arguably five to ten years. Everyone's like, oh, it's dead.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That some economists are coming up with. And so I think the problem with The idea of alphas and betas is alpha is an intuitive concept, is excess return controlling for a bunch of risk. But the mechanical construct, it's a statistical item, and it can be totally manipulated, where obviously all alpha can become beta because you just put the alpha generator on the beta side and you can go buy it. But just because it can be beta, it doesn't mean it's not alpha. Doesn't mean it's not always not always not always not”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, after controlling for all these other quote unquote risk factors, but let's take momentum, for example. Okay, let's say we think momentum is alpha. If you run momentum and you control for market, size, value, blah, blah, blah, you're going to have a huge alpha. So what do you do to control for the alpha momentum? Throw a momentum factor on there. Now what happens to momentum strategy? They have no alpha. Now is that because they don't work and they're not mispriced or is that just because you controlled for the momentum factor to say that momentum doesn't work anymore? Well, no, momentum still works and it's been embraced in a factor, but that doesn't necessarily mean that that factor is a true risk factor. What if the returns associated with it are associated with mispricing problems, not like fundamental risks like it co-varies with your future consumption or whatever fancy macro or model?”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. Because all it is, is alpha is literally just when you calculate this stuff formally, beta is the coefficient on the factor. Alpha is just kind of the average intercept, the kind of the extra you get that's unexplained for. The dev”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Turns out that we looked at that quant value algorithm, which basically is essentially a computer version of what the value investors club guys do by cheap, high quality firms with a ton of analysis on like the quality component, but cheapness is a primary. Turns out that the correlation between just buying like a super active, cheap, high quality basket is essentially the same in very, very highly correlated with kind of what quote unquote the alpha generation is from these stock picker people. So what is alpha? What is beta? Who knows? Alpha's just an intercept on a regression where if you put enough factors in there, obviously alpha is always zero. But to some extent, if super concentrated.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very precise, which was a great lesson, and then to be more precise on that particular thing, this is not really in the dissertation because this is a little bit too practitioner focused, I would say. But after the fact, we said, wow, this is incredible. You have all these people that spend all this time incredible effort in data collection, information, come up with a thesis on the stock pitch. I'm really curious, can this be quantited out?”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I analyze They clearly have some skill, but you can't say that all value investors beat the market. And I was like, he's being very...”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, same thing. Just good dude. Like, if I was in the Marine Corps and I could transplant him 50 years earlier, I wouldn't have that guy in my foxhole. Like, this guy's good to go, regardless of what he knows about finance. So back to that, I ran down there. And it was the same thing like as Cliff said. He's very, very open-minded, empirical, evident, scientific focus. Like if you got the evidence, you run the right robustness test, like, all good. So go down there. And, you know, in my dissertation in the abstract for this particular paper, I made an overstated claim. I said value investors beat the market. He's like, no. The sample of value investors you analyze be at the market. And so literally it was like that two or three word difference that semantics matter and that kind of stuff. Coach one is over.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, yeah, a little off track, but as just a human being, the guy grinds every day, he's super honest, super humble, works his face off. Like, I don't care if he's baking donuts. I like this dude. He happens to be a Nobel Prize winner. That's awesome. But it's more about a fundamental respect for just...”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“He's very open minded. Asset. Exactly. So, and this is my like, oh my God, I'm dead moment. So, of course, I run down. I'm like, you know, and everyone calls him profama. I'm sure like Cliffaz price, I would never call him by his first name. Yeah, so Jean.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“One part of it. Yeah, I had a theory paper as well, which was beyond this discussion. But write this thing up. It actually says that these value investors actually do have skill and, you know, the Fisher market hypothesis, it just seems to be some slack in it, which is fine. So I sent it off to him. And of course, the first email I get is basically, no, this is wrong. Your conclusion is false. So I'm like, oh, great. It just wasted a year of my life and I'm totally screwed.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Of coverage Of reasons why small value. When you read their thesis, a lot of these guys are talking about long duration anomalies. They're like, hey, the cell side's crazy because they're trying to beat the. So a lot of it made intuitive sense. And it was all good. I literally read every single one of these stock pitches, catalogued it. I had them all databased by like, what did they mention as to why they liked this idea? What have you? So, anyways, write the same.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let me Well, no, actually, interesting enough, well, it's kinda, but in an indirect way. So when you actually look at the performance. As a whole, they're actually pretty good. Like these people add real value. It's unclear that if you paid in their funds after the two net of fees, taxes, et cetera. But there's certainly evidence that these guys have some skill. And especially when you get that segmented down to like the small value items, there's no doubt this group has a ton of skill.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Little beats the market, blah, blah, blah. Yeah, great book. Great ideas. He has this organization called Value Investors Club, which is basically like an invite-only group of all these hedge fund managers and really smart kind of fundamental stock pickers. And he'd been doing it since 2000. I was like, hey, this is a really great data source where there's all these like full-scale stock pitches from the buy side.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So Clifted Valiant Momentum. Cliff askedness of AQR. I actually pitched him on value exclusively. I wasn't going to touch the momentum pain trade in a dissertation because I wasn't that wild as Cliff was. But what I did is, you know, I've always been a stock picker reading Ben Graham, Warren Buffett stuff, it's blue in the face. I believed that that was the way of the world. And so obviously, you know, you have the most famous guy in the world that says, no, that's never going to work. Screw this guy. I'm going to figure out how to like, you know, let's see if we can outsmart this guy. So what I did is I'm sure if you remember like Joel Greenblatt, he had a little.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The duration of that. For our strategies, we say, no, no, we have to have our products be bought, not sold, because it's more important that our clients and investors understand explicitly, maybe even more than we even understand it, how and why this works, because it's not about us being smarter than the next guy. There's already 100 PhD guys around here that got higher IQs than I could ever dream of. That's not our edge. Our edge is getting the capital matched with a reasonable process that's good enough for our, you know, not 200 IQ brains, that's going to be, that's the buffet trait, basically.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, we can do a billion perturbations of buy cheap. They're all going to be 99% correlated. Do we think ours is marginally better than Joe Blows down the street? Sure. But if you stuck a gun to my head and said, which value model do you want, I'd be like, they're all good. That's not the hard part. The hard part is making sure the money that's in it is able to actually exploit it. It's the duration.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very specific niche. And the reason we're so hyper focused on that niche is going back to that sustainable active framework where you need a couple long-duration arbitrage with long-duration capital in order for it to be a victory. That's the only way you can believably exploit these anomalies is the capital, the source of capital and the education of that capital and its ability to stick to the program is more important than the nuance of your model.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“No consultants, no, it's literally who wants to take care of their money best, the guy who owns their own money because they actually have Horizon. They don't have careers. They're not going to fire themselves. And they just want to maximize their best chance long-term expected compounding. That is the segment that we talk to.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the way we communicate it is this is not for everyone. We have a very segmented component of the marketplace where we need to identify long-duration capital that's really sophisticated and has minimal agency conflicts where their career doesn't really amiable over consult.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pure momentum person where you could go for five, ten years in theory of underperforming and who can do that. Even I would have problems, you know, sticking to the model probably. And I'm like a cold believer in this stuff.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, so the way that value and momentum work in a combination, whereas you mentioned, it's not about an integrated package, it's about pure value, focusing on that religion, and then pure momentum focus on that religion, combining the two. And they happen to have this very great dynamic relationship where they're like yin and yang. When one is blowing up, the other one on average tends to be working. So you get amazing diversification benefits. Whereas if you look at either of those strategies as a standalone basis, you're going to want to jump off a bridge. It's too volatile, but that combination basically gives you more survivability from like a human psychology standpoint, pure value and pure momentum combined ran in a very active way can still have opportunities to have multi-year underperformance, but it's more sustainable than just being a pure value person or”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely. We know multiple multi-billion dollar hedge fund managers with heavy value focus that are literally out of business because of the back half of 2015 because deep value just got destroyed. Right. Redemptions just overwhelm their ability to convince the capital state”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And its analogy is like the bank that we discussed earlier where a bank lends long, borrows short, great most of the time, but sometimes you have a run on the bank. Same thing with value strategies, long duration opportunity that more often than not gets coupled with short-duration capital. Sometimes there's a run on the bank, and when that run on the bank occurs, the winner in that trade ends up being the Warren Buffets, the guys that just hold on to these things like grim death and will not sell.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly, and there's tons of research about this, it all boils down to what they call the principal agent conflict. There's a classic theory paper Andre Scheiper and Rob Vishne in Journal Finance 97. It's called Limits of Arbitrage. And they make this very simple point. We all know what works. The problem is in the short run, it may not work, especially relative to other stuff and to the extent that I can't credibly convince my investors that I'm not an idiot, even though I just lost 20 points to the index and they pull my capital, I'm actually not in a position to take advantage of this. So I kind of hold back. So the only way to really exploit true active anomalies is you need to, one, have a process that takes advantage of some bias problem, but then more importantly is you need to couple the capital that's there to exploit and make sure it has the same direction.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“The pain trade exact. And pain trades, ironically, are the exact trades you want to own if you want to have a sustainable out-of-sample chance at outperformance. Because now you want to have a credible reason why other people on the side of this trade are not make a good decision. Overreaction, bad news, overreaction, good news, or what have you. Then on the other hand, we understand, well, what are the other competitive players in the market doing? And why aren't they already doing this? And it's usually because they like their jobs a lot more than they like actually taking advantage of anomalies.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Easy to arbitrage, but that is totally not true. And I would say the biggest issue with quote unquote arbitrage on things like value or”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, something like that. Because you got to have someone can't be a perfectly rational buyer and seller because then prices would never deviate from their fundamental value in the Fish Atmark hypostasis would hold. But clearly, there's overwhelming evidence that that happens, but the question is, why is it sustain? And so that's where we got to look at the incentives of those who manage the capital. And for easy things that are easy to arbitrage, like if we see a $20 bill on this table, well, let's grab it. What if we see a $20 bill on the table, but there's a grizzly bear over it? Like, is that rational that a $20 bill is there? No. But the problem is to pick up this $20 bill or a grizzly bear there. So sometimes it's not frictionless to arbitrage prices, which is a cornerly assumption of the Fishermar, is that competition will always drive prices to fundamental because it's assumed it's...”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And you have open secrets called value momentum. Value as a strategy has been around for a hundred years. Momentum was talked about like also 200 years ago. So it's not like these are secrets and yet they continue to work. So I needed to intellectualize how is this possible? And what I started thinking about is I started thinking about behavioral finance and the two real building blocks of it, which are one, understanding human behavior. And two, understanding institutional incentives to arbitrage bad behavior. So most factors exist typically because there's some sort of expectation error on behalf of investors that creates a dislocation from fundamental prices.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure, so I've always been puzzled with this question of we find this factor. It generates these excess returns. Why is this there and why will it continue? Because, you know, sorry.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's revolutionized access to retail, I would say more typical investors. In the old days, you could always get clean, process driven factor exposures as an institutional investor, but you never could do it as a retail investor with tax efficiency and reasonable fees. And now the world is your oyster. You can go on your schwab account and buy a really great factor exposure for low cost with tax efficiency and full transparency. And I think that's revolutionizing the asset management business as we speak.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. So we apparently like a lot of pain and anguish and fighting uphill when we probably don't have to. Maybe that's a shared characteristic of Cliff and I is what it seems.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it is now I got to pay real market cost of capital, and you're at a competitive disadvantage compared to this company that can, you know. Check out overvalued stock to do acquisition”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. So their price movement momentum fundamentally is changing their fundamentals. And if marketplace can't anticipate kind of the second derivative or non-linear change, they'll always kind of underappreciate the benefit of good prices because you also get lower cost of capital on the street. If I'm a high flying stock, every banker in the world is going to help me go sell that overpriced stock to fund acquisitions and what have you. If I'm a total loserville stock, you know, I got to pay cash.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, exactly. And value is something I think that's way more understood because it's more intuitive, buy cheap stuff everyone hates. You get kind of a distress premium, you know, careers premium, where momentum, LinkedIn, who just dropped 50% until recently here. But so, what do you think when most of your comp, and it's all a human capital business, is tied to your stock price, LinkedIn.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“To some extent, and you know, as has a great quote about it, like we all knew the world was flat before or wasn't flat before we could explain exactly, you know, why it was actually around.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“All about what is the preponderance of the evidence kind of tilt you towards because God only knows what really explains value momentum.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's basically like the fun flows arguments. And there's actually a new paper that I can't remember. It's some new journal finance paper. It's a theory paper that's trying to explain the value and momentum effect via fun flows, where like one fund is like losing because they own the value stock. So they're getting out of there. Then other funds, they're winning. They own the winner stocks and then because they're winning, they get more fun flows and then those keep moving. And eventually like the value stocks get too cheap. They mean revert. Momentum stocks unless you keep staying in the high momentum eventually crash and burn. And there's all these theories about trying to explain value momentum, not via behavioral overreaction to bad news, underreaction to good news theory, but through like a fun flows argument. There could be something to it. I think all no one really knows exactly how and why this works.”
2016-06-24 · Masters in Business · Interview With Wesley Gray: Masters in Business (Audio) · IDENTIFIED FROM THE TRANSCRIPT · source