The practical guide to finding value and opportunity in large-cap stocks using investor behavior Large-Cap is an abbreviation of the term "e;large market capitalization"e; and refers to the stock of publicly traded companies with market capitalization values of roughly more than $10 billion, like Walmart, Microsoft, and Ford. Because of their size, the conventional view is that these companies do not present investors with an ability to be opportunistic. The Large-Cap Portfolio + Website argues that, contrary to popular perceptions, significant opportunities exist in these stocks. Written with a fluency that both the savvy amateur and professional investor will understand, the book fills a void in the market by offering the practitioner a methodology to identify and approach the major assumptions that underlie valuation, with an emphasis on issues that are more relevant to the analysis of large-cap stocks. Full of useful information on how to reap the rewards of stocks that most investors avoid Presents essential insights into understanding stock valuation Includes an actionable chapter devoted to portfolio management Packed with timely instruction, Large-Cap Portfolio gives readers invaluable insights and examples of how to build portfolios that will out-perform broad market benchmarks.

The practical guide to finding value and opportunity inlarge-cap stocks using investor behaviorLarge-Cap is an abbreviation of the term "large marketcapitalization" and refers to the stock of publicly tradedcompanies with market capitalization values of roughly more than$10 billion, like Walmart, Microsoft, and Ford. Because of theirsize, the conventional view is that these companies do not presentinvestors with an ability to be opportunistic. The Large-CapPortfolio + Website argues that, contrary to popularperceptions, significant opportunities exist in these stocks.Written with a fluency that both the savvy amateur andprofessional investor will understand, the book fills a void in themarket by offering the practitioner a methodology to identify andapproach the major assumptions that underlie valuation, with anemphasis on issues that are more relevant to the analysis oflarge-cap stocks.* Full of useful information on how to reap the rewards of stocksthat most investors avoid* Presents essential insights into understanding stockvaluation* Includes an actionable chapter devoted to portfoliomanagementPacked with timely instruction, Large-Cap Portfolio givesreaders invaluable insights and examples of how to build portfoliosthat will out-perform broad market benchmarks.

ForewordAcknowledgmentsIntroductionPart One: The Large-Cap Opportunity and ChallengeChapter 1: Trends in Large-Cap Investing and the Opportunities They PresentDefining a Large-Cap StockUnderstanding the S&P 500 IndexExamining the Growth of Indexed EquitiesDefining Active ManagementSo What Does This Mean for Investors?Two Additional ConsiderationsFinally, Something TimelyConclusionsNotesChapter 2: Risk & UncertaintyFinancial Measures of RiskAccounting Measures of RiskDifferentiating Between Certain and Uncertain Cash FlowsConclusionsNotesPart Two: Market InefficiencyChapter 3: An Introduction to Market EfficiencyThe Basis for Market Efficiency and the Efficient Markets HypothesisEfficient Markets HypothesisEmpirical Support for the Efficiency of MarketsConclusionsNotesChapter 4: Evidence of Inefficiency in Investor Behavior and Market BehaviorClosed-End Fund Discounts and PremiumsMarket Bubbles and Market CrashesThe investor vs. their investment...or the investor vs. themselvesBook to Market Effects and Other Value CriteriaConclusionsNotesChapter 5: Individual Decision MakingThat thing about us being rational...Bayesian, non-Bayesian, what does this mean?Great company's always make great stocks...Representative SequencesNow that you put it that way...Dropping an Anchor in a Sea of InformationConclusionsChapter 5 Appendix: Utility Theory and Prospect TheoryNotesChapter 6: Correlated Mistakes and the Failure of ArbitrageHerding and Why We're Predisposed to Correlated MistakesEvidence of Herding in Securities Markets and in the Analysis of Common StocksFeedback Mechanisms and Mood ContagionsSmart arbitrageurs will save us! Won't they?Some related considerations in approaching the active management of investments...ConclusionsNotesChapter 7: Conventional Views on Sources of Market InefficienciesStructural Impediments to Market EfficiencyPertinence to Large-Cap UniverseChapter 7 Appendix: Under-Explained Market PhenomenonNotesPart Three: Research and Portfolio ManagementChapter 8: Identifying Large-Cap Stock Opportunities and Optimizing Research ProcessesIdentifying Large-Cap Stock OpportunitiesFilters and Relative Assessments of ValueSubjective Identification of Over-Optimism and Over-PessimismOver-Confidence, Information Overload and the Structure of Investment FirmsConclusionsNotesChapter 9: Approaching Growth in Large-Cap Stock ResearchAre we good at predicting growth?Equity Valuation BasicsLimitations to Estimating Long-Term Growth RatesAbnormal Growth Magnitude and Abnormal Growth DurationTraditional Methods for Determining GrowthPerversions of Growth Estimates in Large-Cap StocksRecognizing that markets are efficient over the long-term: a refresher on microeconomic theory.Some further considerations when predicting growth ratesSolutionsConclusionsNotesChapter 10: Hewlett-Packard Company Case StudyA Look at HPQ's Historical Performance and OperationsBehavioral Biases and Evidence of Analyst Over-ReactionEvaluating the Market's Assessment of HPQ's Growth ProspectsPulling it all together...Chapter 10 Appendix: Calculating Underlying Assumptions Relevant to the Valuation of HPQNotesChapter 11: The Challenges of Managing Large-Cap Common Stock PortfoliosUnderstand Your Universe and BenchmarkOff-Benchmark SecuritiesPosition SizesTurnoverCommodity-Oriented Holdings in the Large-Cap PortfolioMacroeconomics and Portfolio ManagementConclusionsNotesWhat's On the Companion WebsiteAbout the AuthorIndex