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WG
Wesley Gray (not verified)
12th July 2016 | 9:21am

Joachim,
Great post. We wrote a paper in the JPM http://www.iijournals.com/doi/abs/10.3905/jpm.2012.39.1.112 that made this point as well. Sorting stocks on forward E/P actually underperforms the market, on average. And yet, nobody seems to pay attention, as most "value" based index methodologies include some form of forward looking price/fundamental. Crazy.