The 52-Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion

The 52-Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion

by Luke L. Wiley
Released April 2014
Publisher(s): Wiley
ISBN: 9781118853474

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Book description

A new but timeless strategy and mindset that should greatly help investors lower downside risk while achieving market outperformance

In The 52-Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion, wealth manager Luke L. Wiley, CFP examines the principles behind selecting the outstanding companies and great investment opportunities that are being overlooked.

Along the way, Wiley offers a melding of the strategies used by such investment giants as Warren Buffett, Howard Marks, Michael Porter, Seth Klarman, and Pat Dorsey. His proven formula helps investors get the upper hand by identifying solid companies that are poised for growth but have fallen out of the spotlight.

  • Shows you how to investigate companies and identify opportunities

  • Includes detailed discussions of competitive advantage, purchase value, return on invested capital, and debt levels

  • Presents several case studies to examine companies that have overcome obstacles by trading around their 52-week lows

    • The 52-Week Low Formula is a must-read for investors and financial advisors who want to break through conventional strategies and avoid common mistakes.

    Table of contents

    1. Introduction
    2. Foreword
    3. Acknowledgments
    4. Chapter 1: The 52-Week Formula
      1. The Birth of The 52-Week Low from a $1,400 Book
    5. Chapter 2: Herding and the Bandwagon Effect
    6. Chapter 3: Filter 1: Competitive Advantage
      1. The Five Competitive Forces
      2. Barriers to Entry
      3. Network Effect
      4. Switching Cost
      5. Powerful Suppliers
      6. Substitute Offerings
      7. What to Look For
      8. Summing It Up
    7. Chapter 4: Five Common Mistakes Investors Make
      1. Mistake 1: Trusting Your Emotions Instead of Engaging the Mind
      2. Mistake 2: Lack of Discipline and What is the Ulysses Contract?
      3. Mistake 3: Apathy the Halo Effect
      4. Mistake 4: Information Overload
      5. Mistake 5: Mistaking Value and the Risk of Familiarity
    8. Chapter 5: Filter 2: Free Cash Flow Yield
    9. Chapter 6: The Power of Fear and Decision Fatigue
    10. Chapter 7: Filter 3: Return on Invested Capital
      1. A Complicated Measurement
      2. Turning Back the Clock
    11. Chapter 8: This Time Is Never Different
    12. Chapter 9: Filter 4: Long-Term Debt to Free Cash Flow Ratio
      1. Calculating Long-Term Debt to Free Cash Flow
      2. A Few Notes about Debt
      3. Long-Term Debt to Free Cash Flow: Head-to-Head
      4. Summing It Up
    13. Chapter 10: The Sunk-Cost Bias and Pride and Regret
    14. Chapter 11: Filter 5: The 52-Week Low Formula and My Journey Trying to Disprove It
      1. A Matter of Timing
      2. My Journey of Skepticism
    15. Chapter 12: The Importance of Embracing a Trailing 12-Month Return of −25 Percent
    16. Chapter 13: The Problem with Selective Perception and Confirmation Basis
    17. Chapter 14: Putting It All Together
      1. Reviewing the Filters
      2. Your Part to Play
    18. Afterword
    19. About the Companion Website
    20. About the Author
    21. Index
    22. End User License Agreement

    Product information

    • Title: The 52-Week Low Formula: A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion
    • Author(s): Luke L. Wiley
    • Release date: April 2014
    • Publisher(s): Wiley
    • ISBN: 9781118853474