Comments by "JP 72" (@739jep) on "Are \"Good Companies\" Good Investments?" video.

  1. Really churning out the great content now Ben! Thanks again 👍 At a faster rate I should say, it’s always been quality !
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  2. Having broad exposure to the value factor is perfectly reasonable and rational. Picking individual stocks on the basis of value is not - but that’s not what he’s advocating for. He did say that it’s difficult to answer the question ‘are good companies good investment’ because everyone has different definitions as to what a good company is. We need to know what people mean by ‘Good company’ otherwise the proposition is non falsifiable making it useless. Regardless , it all comes back to price anyways , if a ‘good company’ is priced as if it were a ‘good company’ then the investor has no logical reason to expect alpha. For the phrase ‘a good company is a good investment’ you would have to assume the market is systematically undervaluing ‘good companies.’
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  3.  @Nasdel  I would say that they have higher expected returns , but not higher risk adjusted returns. Size , value , profitability, market and investment are ‘risk factors’. The reason for the higher expected return is the higher risk. So to increase exposure to those types of stocks you may want to consider your own tolerance towards risk.
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  4. That’s always a possibility , same holds true for the market premium though.
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  5. Try his video on investing in happiness.
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  6. I recommend his video ‘five factor investing with etfs’
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  7. My dude , he was literally listing many possible ways to ‘measure’ what investors perceive to be a ‘good company’. He contradicted nothing. The whole point to begin with is that there is no objective way to determine what a good company is , and that everyone has their own definitions , hence why there are many ways to attempt to measure it. The point still stands , a good company does not equal a good investment. How the market prices in the ‘goodness’ of the company matters to returns. If a good company is priced as if it is a good company why should investors expect a higher return simply because it’s a good company?
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  8.  @hanst7218  yes exactly right. Id even go so far as to say the difficulty in defining whether a company is good or bad is irrelevant , because even if we were to have a concrete definition the information about whether a company is good or bad is information that is likely priced in already. Your second reply is basically the main message to gain from the video. A good/bad company is not necessarily a good/bad investment. I think it’s even called the ‘Good Company : Good investment fallacy’ but maybe it has another name.
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  9. It also leaves room for luck 🍀
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  10. He never said index funds are bad. He said index funds are the best option for most people. There are just caveats , as there is a lot of problems in the etf space. It’s still possible to be under diversified and invest in index funds - for instance if you have too much home country bias - or if you pick thematic etfs or if you try to market time.
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