Outside the Box: 5 hidden gems from a market-beating manager

Back in the early 1990s, a small group of investors printed money with a system based on the logic that Wall Street analysts are a lot like cockroaches.

These quants had discovered that just like one of the disgusting little critters, a single upward estimate revision from a Wall Street sell-side analyst typically meant many more were in the wings.

This system cleverly played on the caution of sell-side analysts. When these analysts expected earnings to go up $1 per share in a year, for example, they might roll that out 25 cents at a time. Each time, they’d wait for evidence to confirm the company was still on track to actually book the entire dollar before announcing their next bump upward.

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