Today is a very special episode with John Reese, the founder and CEO of Validea.com. He has created a way to allow anyone to have access to the guru strategies based on some of the most successful investors of all time such as Warren Buffet, Peter Lynch, etc. In this episode, he discusses how the gurus were selected and what inspired him to create Validea.com.
Check out our H2 hedge fund letters here.
“Well my first interest into the stock market came when I was still late elementary school. My father was still a subscriber to Valueline and every week a list of 100 stocks with details, analysis, numbers and charts would appear. I would pore over those and be absolutely fascinated. I didn’t do much with this. I went on to MIT to study computers and electronics. While I was there I worked for MIT’s artificial intelligence laboratory and my main project was in extracting the wisdom and knowledge from books into computer programs that can then proceed to evaluate things in the same way that the author had described that they did in those particular books. I would come back to use that capability many many years later. It wasn’t until 1990s when I had sold my first business that was in local networking and looking how to invest my own funds particularly in the stock market that I really started to pay serious attention to investing. And at that point I started reading a total of 50 different periodicals and publications.”
1:16 – How did you get started in the finance and investment profession? What caught your interest?
7:26 – Do you have a favorite investor from the selection of gurus? Is there a particular approach from any of them that you like?
10:26 – Are there any strategies that surprised you? Are there any strategies that did well or did not as good as you initially thought?
12:38 – How would you describe your personal investment philosophy?
13:59 – With the Validea portfolio, it is pretty concentrated with 10-20 stocks, can you describe why is that?
16:43 – What are your views on portfolio concentration and diversification?
17:16 – What is your view on the value premium?
18:38 – What are your views on the small cap premium?
21:32 – What are your views on the momentum premium?
24:19 – With these factors, are there any attractive and when they would be the most effectively applied?
26:00 – How would you define mean reversion?
30:44 – Can you tell me about the guru ETF?
32:22 – Can you tell me about the Validea Legends? What was your objective and how is it accomplished?
38:25 – How do you define and measure risk?
40:44 – What are your favorite books?
41:25 – What are your hobbies?
42:24 – For angel investing, do you follow a particular philosophy or strategy?
Enjoy and thanks for the listen!