The rising tide

A few days ago, I had the opportunity to judge the 'NJ Factor Investing Olympiad 2024'. The final round had eight teams, mostly from well-known business schools, and the eventual winner was the team from IIM-A. You can learn more about this contest from www.njfio.com. Briefly, factor investing is an approach to investing that involves choosing securities based on certain attributes or factors that are thought to influence their returns. These factors may encompass traits like value, size, momentum, quality, and volatility. This sounds obvious to any seasoned investor, but the important distinction here is that subjective judgement plays no role in stock selection. Factor investing is a somewhat fancy name for rule-based, algorithmic investing. The job of the investor is to formulate the rules based on their own understanding and research. They can try and backtest