Our approach to portfolio strategy is based in microeconomics and seeks to exploit a wide range of anomalies to identify stocks that should outperform the market. These anomalies can include misvaluation, overinvestment or retrenchment by management, and excessive extrapolation of trends by investors. Our work relies on a proprietary, customized database that contains large quantities of company-level data, some of which span nearly a century. We look for situations in which the current state of affairs is untenable, and the reward for being patient is sizable.

At times, macroeconomic concerns dominate those at the company level, so we periodically do in-depth work on these higher-level issues as well. In the past, we've researched topics such as the sustainability and consequences of housing cycles, credit crises, capital spending booms, the interrelationship between the profitability of the "old" and "new" economies, and the channels through which monetary policy operates and the likelihood that it will achieve its objective.

In our regular publications entitled "Equity Portfolio Strategy" and "International Portfolio Strategy," we present our investment views, topical research, and a series of variables that we continually monitor, such as market valuation, risk premium, earnings, capital use and performance data. For some of these data, we have a history that begins in the 19th century. We also present analyses of the composition, quality, and level of corporate earnings; a framework for assessing the expected returns from valuation and trend-following strategies, an in-depth analysis of corporate capital raising and deployment and investors' reactions to this behavior; and assessments of opportunities by style and capitalization. Periodically, we also publish in-depth studies on broad, fundamental subject matters.

© 2011 Empirical Research Partners - Member: FINRA / SIPC