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The 52-Week Low Formula
A Contrarian Strategy that Lowers Risk, Beats the Market, and Overcomes Human Emotion
“In The 52-Week Low Formula, Luke Wiley makes it clear that if you hope to be a superior investor, your thinking has to be different from that of the crowd and better. He provides insight into how control over psychological influences can enable it to be different, as well as an example of the kind of disciplined, reason-based process that’s essential if it’s going to be better.” "The gathering and arraying of the data, the projection, and the judgment calls are the simple tools we train our research analysts to focus on. Luke Wiley's The 52-Week Low Formula highlights this approach to focus on price as an important element to stock selection price." “Luke Wiley’s The 52-Week Low Formula will make you a far wiser investor if you give it a few minutes of your time to analyze this careful low risk investment philosophy.” “My only argument with The 52-Week Low Formula is that its title makes it seem overly simplistic. Rather than a rules-based formula, this book is a useful and substantial framework for understanding the key elements of long term investing. With refreshing clarity, Luke Wiley combines his own research with the core tenants of securities analysis to create a thorough yet readable guide that will serve new and experienced investors alike.” “The foundation of successful investing is discipline, and Luke Wiley’s The 52-Week Low Formula offers one of the clearest and most well-reasoned stock-investing disciplines you’ll find. Investors of all stripes will benefit from the wisdom in this book.” “Buying great businesses at cheap prices is easy in theory, but hard in practice. Luke Wiley shows you how to put your emotions aside, ignore the crowd, and successfully follow this profitable investing path.” “Luke Wiley’s The 52-Week Low Formula is a well thought out strategy that should appeal to any investor looking to beat the market while taking lower risk. How can you argue with a strategy that results in surfacing companies with low expectations, strong balance sheets, cash flow and competitive position?” “Luke Wiley has finally answered the value investor’s age-old question: When to Buy. This businesslike and commonsense approach are valuable tools to identify great companies at great prices. Wiley shows us a disciplined approach to buy low and sell high using a formula everyone can follow.” “Great book for those looking to improve both their investment process and odds of finding successful investments. Wiley uses vivid examples that bring the concepts to life.” “The 52-Week Low Formula should be required reading for all new investors or those looking for better returns. Luke Wiley has captured the essence of value investing in a readable format. This was written for the average investor that has been disappointed in following the ‘herd’. This is not a textbook on investing, but instead a disciplined formula for better, more consistent investing with five essential steps. This should be at the fingertips of all those Financial Advisors looking to improve their returns for their clients and differentiate themselves in a very crowded market.”
—HOWARD MARKS, Chairman and Cofounder of Oaktree Capital Management; Author of The Most Important Thing: Uncommon Sense for the Thoughtful Investor
—MARIO J. GABELLI, CFA; CEO of GAMCO Investors, Inc. (NYSE: GBL)
—DONALD R. KEOUGH, Retired President of Th e Coca-Cola Company and author of The Ten Commandments for Business Failure
—CHRISTOPHER C. DAVIS, Portfolio Manager and Chairman, Davis Advisors
—HAYWOOD KELLY, CFA, Head of Global Research, Morningstar
—PAT DORSEY, CFA, Founder of Dorsey Asset Management
—PAUL D. SONKIN, portfolio manager, GAMCO Investors, Inc. (NYSE: GBL), and Co-author of Value Investing: From Graham to Buffett and Beyond
—MARY BUFFETT, New York Times best-selling author, Marybuffett.com
—MICHAEL SHEARN, Time Value of Money, LP, author of The Investment Checklist: The Art of In-Depth Research
—ROB KNAPP, President, Supernova Consulting Group LLC; author of The Supernova Advisor
Luke L. Wiley (Author), Wesley R. Gray (Foreword by)
9781118853474, Wiley
Hardback, published 30 May 2014
240 pages
23.1 x 15.2 x 2.5 cm, 0.431 kg
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. 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.
Introduction xiii Foreword xxvii Acknowledgments xxxi Chapter 1 The 52-Week Formula 1 Chapter 2 Herding and the Bandwagon Effect 19 Chapter 3 Filter 1: Competitive Advantage 25 Chapter 4 Five Common Mistakes Investors Make 55 Chapter 5 Filter 2: Free Cash Flow Yield 67 Chapter 6 The Power of Fear and Decision Fatigue 83 Chapter 7 Filter 3: Return on Invested Capital 91 Chapter 8 This Time Is Never Different 105 Chapter 9 Filter 4: Long-Term Debt to Free Cash Flow Ratio 109 Chapter 10 The Sunk-Cost Bias and Pride and Regret 131 Chapter 11 Filter 5: The 52-Week Low Formula and My Journey Trying to Disprove It 137 Chapter 12 The Importance of Embracing a Trailing 12-Month Return of −25 Percent 151 Chapter 13 The Problem with Selective Perception and Confirmation Basis 163 Chapter 14 Putting It All Together 169 Afterword 179 About the Companion Website 183 About the Author 185 Index 189
Subject Areas: Finance & accounting [KF]
