Investment Fables
This web site is designed to support "Investment Fables ", printed in 2004. The publisher is John Wiley and Sons. You can navigate the site by going to individual chapters and getting supporting material by chapter, You can read the preface to the book by clicking here. I have updated the screens specified in the book to reflect March 2004 data.

You can pick the chapter that you would like to go to, to see illustrations, solutions and other supporting material.
Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6
Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12
Chapter 13 Chapter 14 Chapter 15      

Chapter 1: Introduction
Topic Details
 
Synopsis

Chapter 2: High Dividend Stocks: Bonds with Price appreciation?
Topic Details
The Core of the Story

The Optimist Pitch
The Pessimist Pitch

Theory

More on dividend irrelevance
Dividends and Taxes

Empirical Evidence

Dividend Yields and Returns

Crunching the numbers

Dividend Yields by Industry
Dividend Yields for market over time

Stocks with highest dividend yields
Stocks that pass dividend screens

Readings
  1. The Dividend Discount Model
  2. The dividend yield matters....
  3. Dogs of the Dow

Chapter 3: This stock is so cheap! The Low PE story

Topic Details
The Core of the Story Why low PE stocks are good investments
Theory Determinants of PE ratios
Empirical Evidence PE Ratios and Returns over time
Crunching the numbers PE Ratios by Industry
PE Ratios for market over time
Stocks with lowest PE ratios
Stocks that pass the PE screens
Readings
  1. Malkiel on PE ratios
  2. Interest rates and PE ratios

 

Chapter 4: Less than Book Value! What a bargain?
Topic Details
The Core of the Story Why low PBV stocks are cheap
Theory Determinants of PBV Ratios
Empirical Evidence PBV Ratios and Returns over time
Crunching the numbers PBV Ratios by Industry
Stocks with lowest PBV ratios
Stocks that pass the PBV screens
Readings Price to Book Value Bargains

Chapter 5: Stable Earnings, Better Investment?
Topic Details
The Core of the Story Stable Earnings make for better investments
Theory Diversifiable and Non-diversifiable Risk
Empirical Evidence  
Crunching the numbers Stocks with most predictable earnings
Stocks that pass the stable earnings screens
Readings
  1. Measuring Earnings
  2. The Content of an Annual Report
  3. Low Points in Accounting History

Chapter 6: In search of excellence: Are good companies good investments?
Topic Details
The Core of the Story Well managed companies are good investments
Theory Economic Value Added
Empirical Evidence  
Crunching the numbers

Excess Returns and EVA by Industry
Companies earning highest EVA
Companies that pass the Excellence screens

Readings
  1. Learning from the Super Companies
  2. Value Enhancement: Back to Basics
  3. EVA as elixir
  4. An EVA debate

Chapter 7: Grow, baby, grow: The Growth Story
Topic Details
The Core of the Story Growth stocks are good investments
Theory

The Determinants of Growth

Empirical Evidence  
Crunching the numbers Historical Growth Rates by Industry
Stocks with highest expected earnings growth
Stocks that pass the Growth screens
Readings
  1. Estimating Growth
  2. The inside of earnings growth in the 1990s
  3. Evaluating analyst growth estimates
  4. Competitive Advantage Period
  5. Myths about valuing technology stocks
  6. Peter Lynch on growth stocks

Chapter 8: The Worst is behind you: The Contrarian Story
Topic Details
The Core of the Story The Contrarian Story
Theory

Investor Irrationality
Market Bubbles

Empirical Evidence  
Crunching the numbers

Stocks that have gone down the most
Stocks that pass the contrarian screens

Readings 1. Market Markdowns offer opportunities

Chapter 9: The Next Big Thing: New businesses and young companies
Topic Details
The Core of the Story Young companies are good investments
Theory/Background

Initial Public Offerings
Venture Capital and Private Equity Investing

Empirical Evidence IPO returns over time
Crunching the numbers Stocks that pass the small cap screens
Readings
  1. Venture Capital Secrets
  2. Venture Capitalists: Secrets for success?

Chapter 10: Mergers and Returns: The Acquisitive Company
Topic Details
The Core of the Story

Buy aquirers
Buy targets

Theory/Background

Background on Acquisitions
Motives for Acquisitions

Empirical Evidence  
Crunching the numbers Potential target companies
Readings
  1. Synergy in Mergers
  2. The Keys to Success in M & A: The KPMG Report
  3. Stocks versus Cash Acquisitions: The Performance of Acquirers
  4. New Rules on Goodwill
  5. CEO Egos and Big Mergers

Chapter 11: A Sure Thing: The Allure of Arbitrage
Topic Details
The Core of the Story Arbitrage and sure profits
Theory/ Background Futures Arbitrage
Options Arbitrage
Empirical Evidence  
Crunching the numbers

Most discounted closed end funds

Readings
  1. Measuring the Performance of Hedge Funds
  2. The Philosophy of Hedge Funds
  3. Measuring the returns at Hedge Funds
  4. Have hedge fund managers become risk averse?

Chapter 12: Its all upside: The Momentum Story
Topic Details
The Core of the Story Momentum and payoff
Theory/ Background Patterns in stock prices
Charting and Technical Analysis
Empirical Evidence  
Crunching the numbers Stocks with most momentum
Stocks that pass the momentum screens
Readings  

Chapter 13: Follow the experts
Topic Details
The Core of the Story Experts know more/better
Theory/ Background Equity Research Analysts
Market Strategists
Investment newsletters
Empirical Evidence On-paper versus Real Returns: The Value Line lesson
Crunching the numbers

Stocks most recommended by analysts

Readings  

Chapter 14: In the long term.. Myths about Markets
Topic Details
The Myths Stocks always win in the long term
Market timing trumps stock selection
Market timing works
Theory/ Background

Market timing approaches

Empirical Evidence Stock Market Returns over time
Crunching the numbers Market timing indicators
Readings
  1. The Importance of Asset Allocation
  2. The Cost of Being Out of the Market
  3. Mutual Fund Cash Positions
  4. Market Volatility and Timing
  5. Greenspan on Market Timing
  6. A Poll of Money Managers
  7. Market Neutral Mutual Funds
  8. A Warning on the Market
  9. A Technical Warning on the Market
  10. Is the market's PE too high?
  11. Why investors are active

Chapter 15: Ten Lessons for Investors
Topic Details
The Ten Lessons Read the chapter