April 28, 2022

Quality vs Value: marketing vs data

An interesting topic arose for one of our weekly online coffee chat stock discussions: What is the Value Rank and how does it compare to the Quality aspect sometimes cited by investors. Dr. Hermann Stern explained this on February 18th.

Note: This video is in German only. If you would like to be a part of our stock discussions and learn more on stock investing or discuss your own portfolio, we now have dates in English. Click here to sign up for free.

As an investor, how do you tackle the Obermatt Value Rank? The higher (greener) the Value Rank, the cheaper the company. This means that the company isn’t well appreciated on the stock market: it possibly has issues. For example, one of the companies with a dark green Value Rank is Clariant, and they have been punished badly on the market due to balance sheet fraud. This is why we suggest you keep the Value Rank only as a piece of information and not the deciding aspect. Always dig deeper into the company before buying.

Quality, on the other hand, looks like a fashionable new marketing term: journalists use it to describe an already well-positioned company. You probably won’t make a mistake by investing in one of those companies, as journalists can’t afford to deviate from the general opinion - they would get punished if they did.

The second best data-driven investment strategy is the Growth Strategy. It is better to consider Growth vs Value, than Quality vs Value. Learn more on different investment strategies and how we calculate our Value Rank by watching our latest video.

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