Stock investing is often thought of as a glamorous endeavor. “It’s supposed to be well-coiffed men in finely tailored suits — guys who know what the next big thing will be before you know what the last big thing was — barking orders to buy, BUY!” Validea CEO John Reese writes in his latest for Forbes.com. “It’s supposed to be tech stocks with explosive earnings and new companies with Gotta-Have-It products and soaring shares. It’s supposed to be mergers & acquisitions and billion-dollar back-room deals.”
But if you want to succeed over the long haul, investing isn’t about those things, Reese says, and he uses Joseph Piotroski as a perfect example. “Piotroski isn’t a star hedge fund manager or a billionaire investor who touts stock picks on TV,” he writes. “He’s an accountant. But while teaching accounting at the University of Chicago Graduate School of Business back in 2000, Piotroski wrote a paper that is as meaningful for stock investors as anything a star hedge fund manager has ever written — and it showed that you beat the market not with high-profile, risky stocks, but instead with shares of boring, solid, overlooked companies.”
Reese explains how his Piotroski-inspired Guru Strategy works and looks at some stocks it’s currently high on. Among them: oil and gas driller Noble Corp.