Bob Haugen has spent his career studying what pays off in the market and why. His most recent study, titled “Case Closed” evaluates U.S. Stock performance between 1963 and 2007and validates his longstanding contention that the market is inefficient. To download the paper, click here.

The study shows that throughout the entire period, the characteristics of stocks in the top performing 10% (Decile 10) are the mirror image of the lowest expected return stocks in Decile 1.

The highest expected return stocks consistently demonstrate this surprising profile:

• Low risk
• Highly profitable companies
• Improving profitability
• Large capitalization
• High liquidity
• Inexpensive stock price relative to earnings, dividends and cash flow