Vitaliy Katsenelson

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Vitaliy Katsenelson
BornVitaliy Naumovich Katsenelson
1973 (age 48–49)
Murmansk
🏳️ NationalityRussian
🏳️ CitizenshipAmerican
💼 Occupation
🌐 Websitecontrarianedge.com

Vitaliy Katsenelson (born in 1973) is a Soviet Union-born American economist and investor. He is the author of several books on value investing and a frequent contributor to several financial websites and publications. Katsenelson’s investment philosophy stresses investor psychology, fundamental analysis, concentrated diversification, value investing, and contrarian mindsets. Since 1997, he has worked at Denver-based Investment Management Associates.

Early life and education[edit]

Vitaliy Katsenelson was born in 1973 in Murmansk, Soviet Union.[1][2] He attended the Murmansk Marine College.[3] His father, Naum Katsenelson, taught electrical engineering at the Murmansk Marine Academy. He was also a watercolor painter.[4]

In 1991, when he was 18, the family emigrated to the United States.[5][6] Katsenelson received both his BS ('97) and MS ('99) from the University of Colorado Denver.[5][7]

Investment and academic career[edit]

In 1997, Katsenelson started working at Investment Management Associates, a Denver money manager.[5] In 2000, he received CFA certification and has registered with SEC as an investment adviser.[8][9]

From 2001 to 2007, he was teaching practical equity analysis and portfolio management at the University of Colorado’s Graduate School of Business.[10]

In September 2007, Wiley & Sons published his first book Active Value Investing: Making Money in Range-Bound Markets. It gained positive reviews and Rich Karlgaard, writing for Forbes even compared Katsenelson to Benjamin Graham.[11][12][13]

In 2009, he launched Contrarian Edge, a website that is recommended as a top source on value investing by The Motley Fool, Kiplinger's Personal Finance and Forbes among others.[14][15][16] Later, in 2009 he was accused by the editors of Deepcapture.com of being a member of naked short-selling conspiracy along with Howard Lindzon, Henry Blodget, David Einhorn, Aaron Task and some others.[17]

In 2010, Wiley & Sons published his second book The Little Book of Sideways Markets, where he further developed the concept of sideways markets.[18][19] Also in 2010, Katsenelson started writing for the Institutional Investor magazine. In 2013 and 2016 the publication included his contributions into the lists of most-read articles of the year.[20][21] In 2014, he won two awards, Azbee Awards from the ASBPE (American Society of Business Publication Editors) and Best in Business Honorees from the Society for Advancing Business Editing and Writing, for his contributions to the Institutional Investor magazine.[22][23]

In November 2014, he published a column at Business Insider, where he described his experience of watching and reading Russian-run media for one week following the Annexation of Crimea by the Russian Federation and his reaction towards the government propaganda.[24] His point of view and observations were republished by a number of media in Russia and the world.[2][25][26]

In 2020, Katsenelson self-published his third book, Tesla, Elon Musk and the EV Revolution. Also in 2020, ADVFN website recognized Katsenelson as the “Financial Blogger of the Year” in its annual ADVFN International Financial Awards.[27]

Stock market theories[edit]

In 2007, Katsenelson introduced the concept of a range-bound, or sideways markets.[28] Katsenelson argues that in addition to traditional bull and bear markets there is another type of market, sideways market.[28]

Unlike bull markets where stocks go up, or bear markets where stocks decline, during sideways markets stocks go up and down but end up going nowhere.[29][30] One implication of such moves is that investment funds, which put money into indexes, don’t earn more than the dividends during such periods.[31] Another implication is that since the stock prices (P) are basically flat for a long period of time, most of the growth should come from earnings (E) to get P/E multiple to single digits.[32][33]

According to Kastenelson, Last sideways markets lasted from 1966 to 1982.[34] In his Active Value Investing (2007) and The Little Book of Sideways Markets (2010) Katsenelson argues that the US market entered into another sideways market in 2000.[34][35] He also notes that the bull market of 1982–2000 was a “super-sized” bull market, explaining that if the Dow Jones Industrial Average index were to repeat it percentage increase of 1982–2000 over the next 18 years, it would have to hit an unbelievable 175,000 points by 2028.[36]

Katsenelson criticizes “Buy and hold” investment strategy, saying that investors should be regularly reviewing their portfolio based on such metrics as P/E ratio.[37][38] In his Active Value Investing (2007) book, he introduced Absolute PE model, which derives the intrinsic value of the stock based on the following five conditions: earnings growth rate, dividend yield, business risk, financial risk and earnings visibility.[39] Earnings visibility is of particular importance especially when dealing with the companies, which own shares of other companies. Katsenelson once noted that it was almost impossible to value such financial companies like Citigroup, Bank of America or Goldman Sachs because “for the most part, they were leveraged hedge funds."[40] He expressed similar concerns about mortgage real estate investment trusts.[41]

Katsenelson thinks that to achieve a satisfactory rate of return on sideways market, an investor should pick undervalued stocks, stocks with high dividend yield and carefully consider the right time to buy a stock.[42] Moreover, he believes that if there are no undervalued stocks, an investor should prefer staying in cash, over investing.[42]

Using Nassim Taleb’s concept of antifragility he classifies companies into fragile, robust, and antifragile, explaining how cyclical companies with lots of debt that have to issue equity at low prices during the recession, can destroy their own value (fragile companies).[43] He is interested in finding companies that are antifragile. Katsenelvon defines such companies as having strong business, healthy balance sheet and good management, or at least two out of these 3 factors.[43]

He doesn’t invest in gold, mainly because it is hard to calculate the real value of this asset.[44]

Katsenelson lists Warren Buffett among the people who influenced his thinking.[45]

Publications[edit]

Books[edit]

  • Katsenelson, Vitaliy N. (2007). Active Value Investing: Making Money in Range-Bound Markets. Wiley & Sons. p. 304. ISBN 978-1-118-42883-2. Search this book on Amazon.com Logo.png
  • Katsenelson, Vitaliy N. (2010). The Little Book of Sideways Markets: How to Make Money in Markets that Go Nowhere. Wiley & Sons. p. 256. ISBN 978-1-118-01037-2. Search this book on Amazon.com Logo.png
  • Cunningham, Lawrence A.; Cuba, Stephanie, eds. (2018). "Next Year in Omaha". The Warren Buffett Shareholder: Stories from inside the Berkshire Hathaway Annual Meeting. Harriman House Limited. ISBN 978-0-85719-700-9. Search this book on Amazon.com Logo.png

Articles[edit]

Bibliography[edit]

References[edit]

  1. Sather, Dave (2017-07-03). "Investors with ties abroad reflect on US opportunities". The Victoria Advocate. p. D1. Retrieved 2020-10-25 – via Newspapers.com.
  2. 2.0 2.1 Volchek, Dmitry (2014-11-29). "Россию погубила нефть" [”Russia was ruined by oil”] (in Russian). Radio Free Europe/Radio Liberty. Archived from the original on 2017-04-22. Retrieved 2020-10-25.CS1 maint: Unrecognized language (link)
  3. Katsenelson, Vitaliy (2011-07-30). "Pyrrhic Victories And The Debt Ceiling". Business Insider. Archived from the original on 2013-07-05. Retrieved 2020-10-25.
  4. Youngmann, Gene (2008). "Naum Katsenelson" (PDF). Collage. Colorado Watercolor Society. 53 (4): 6. Archived from the original (PDF) on 2020-10-25. Retrieved 2020-10-25.
  5. 5.0 5.1 5.2 Strauss, Lawrence C. (2009-09-21). "Home on the Range". Barron’s. Archived from the original on 2017-03-10. Retrieved 2020-10-24.
  6. Lewis, Al (2009-01-02). "Bursting Russia's bubble". The Denver Post. Dow Jones Newswires. Archived from the original on 2020-10-25. Retrieved 2020-10-25.
  7. "Alumni Class Notes". University of Colorado Denver. 2020-10-28. Archived from the original on 2021-02-05. Retrieved 2021-03-03.
  8. "Vitaliy Katsenelson: Chief Investment Officer, Investment Management Associates, Inc". CFA Institute. 2020. Archived from the original on 2020-02-02. Retrieved 2020-10-25.
  9. "Vitaliy N. Katsenelson". U.S. Securities and Exchange Commission. 2020. Archived from the original on 2020-10-27. Retrieved 2020-10-27.
  10. Murphy, Stephanie (2006-04-02). "Private banking is key to firm's PB strategy". Palm Beach Daily News. p. D3. Retrieved 2020-10-25 – via Newspapers.com.
  11. Saletta, Chuck (2007-10-15). "Foolish Book Review: "Active Value Investing"". The Motley Fool. Archived from the original on 2007-10-16. Retrieved 2020-10-26.
  12. Giulieri, Brian (2007-10-28). "Feel at Home on the range-bound market". Denver Business Journal. Archived from the original on 2020-10-27. Retrieved 2020-10-27.
  13. Karlgaard, Rich (2008-05-09). "Book Friday--Active Value Investing". Forbes. Archived from the original on 2020-10-26. Retrieved 2020-10-26.
  14. Huang, Nellie S. (2016-12-21). "Best Places to Get Investment Advice". Kiplinger's Personal Finance. Archived from the original on 2016-12-17. Retrieved 2020-10-25.
  15. Shah, Alap (2018-08-22). "Top 17 Value Investing Blogs You Should Be Reading". Forbes. Archived from the original on 2019-01-05. Retrieved 2020-10-25.
  16. "10 Value Investing Blogs You'd Be Crazy Not to Follow". The Motley Fool. 2014-03-02. Archived from the original on 2020-10-25. Retrieved 2020-10-25.
  17. Angelova, Kamelia (2009-12-18). "Meet The Sith Lords: The 20 People Alleged To Be Part Of A Shadowy Short-Selling Conspiracy". Business Insider. Archived from the original on 2016-10-08. Retrieved 2020-10-25.
  18. Brodie, Lee (2010-12-06). "Winning In A Sideways Market". CNBC. Archived from the original on 2020-10-26. Retrieved 2020-10-26.
  19. Pierce, Jeff (2010-12-26). "Review: Little Book of Sideways Markets". Business Insider. Archived from the original on 2018-02-13. Retrieved 2020-10-29.
  20. "Our Best Blogs of 2013". Institutional Investor. 2014-01-01. Archived from the original on 2020-10-25. Retrieved 2020-10-25.
  21. "Institutional Investor's Best Blogs of 2016". Institutional Investor. 2016-12-27. Archived from the original on 2020-10-24. Retrieved 2020-10-24.
  22. "2014 ASBPE Awards of Excellence: Azbee Awards – National" (PDF). 2014. Archived from the original (PDF) on 2014-10-09. Retrieved 2020-10-25.
  23. "2014 Best in Business Honorees". Society for Advancing Business Editing and Writing. 2014. Archived from the original on 2019-08-06. Retrieved 2020-10-25.
  24. Katsenelson, Vitaliy (2014-11-18). "I Just Spent 7 Days Watching Only Russian News And Reading Pravda — Here's What I Learned". Business Insider. Archived from the original on 2015-01-03. Retrieved 2020-10-29.
  25. ""Кремлевская диета". Что делают с человеком росСМИ - эксперимент экономиста из США" [The "Kremlim diet". How Russian media affect people: an experiment of a US economist]. Obozrevatel (in Russian). 2015-03-31. Archived from the original on 2015-12-23. Retrieved 2020-10-29.CS1 maint: Unrecognized language (link)
  26. Lange, Jeva (2016-11-28). "American Pravda: How Donald Trump could sovietize the media". The Week. Archived from the original on 2016-11-30. Retrieved 2020-10-29.
  27. "ADVFN International Financial Awards 2020". ADVFN. 2020. Archived from the original on 2020-07-17. Retrieved 2020-10-25.
  28. 28.0 28.1 Calhoun 2020, p. 310.
  29. Svaldi, Aldo (2007-12-18). "One step up, one step back". The Denver Post. Archived from the original on 2020-10-25. Retrieved 2020-10-25.
  30. De Ridder, André (2011-02-03). "La Bourse stagne? Ne restez pas en surface…" [The stock market is stagnating? Don't stay on the surface…]. L'Echo (in French). Archived from the original on 2020-10-29. Retrieved 2020-10-29.CS1 maint: Unrecognized language (link)
  31. Van Broekhoven, Emiel (2008-05-05). "Emotieloos beleggen" [Investing without emotion]. De Standaard (in Dutch). Archived from the original on 2020-10-29. Retrieved 2020-10-29.CS1 maint: Unrecognized language (link)
  32. Shannon 2013, p. 44.
  33. Strauss, Lawrence C. (2010-12-11). "Don't Bank on It". Barron’s. Archived from the original on 2020-10-29.(subscription required)
  34. 34.0 34.1 Otto 2013, p. 112.
  35. Turner, Elliot (2010-12-17). "Vitaliy Katsenelson: How To Succeed In Sideways Markets". Business Insider. Archived from the original on 2017-07-11. Retrieved 2020-10-29.
  36. Kaminsky 2011, p. 13.
  37. Patterson, Scott (2010-02-28). "Even the Smart Guys Don't Always Get it Right". The Wall Street Journal. Archived from the original on 2020-10-25. Retrieved 2020-10-25.(subscription required)
  38. Wilner, Richard (2009-10-18). "Conditions point to another lost decade". New York Post. Archived from the original on 2020-10-29. Retrieved 2020-10-29.
  39. Jun, Jae (2012-05-08). "Valuation Matters: 7 Ways To Value Stocks". Seeking Alpha. Archived from the original on 2012-05-11. Retrieved 2020-10-26.
  40. Cronk, Brian (2009-09-21). "What American Express Says About Financial Stocks". The Wall Street Journal. Archived from the original on 2020-10-25. Retrieved 2020-10-27.
  41. Stepleman, Robert (2013-09-23). "Does it make sense to buy umbrella or sunglass shares?". Sarasota Herald-Tribune. Archived from the original on 2020-10-27. Retrieved 2020-10-27.
  42. 42.0 42.1 Lange, Kai (2011-05-13). "Wer langweilig ist, wird schneller reich" [Those who are bored get rich faster]. Manager Magazin (in German). Archived from the original on 2020-10-29. Retrieved 2020-10-29.CS1 maint: Unrecognized language (link)
  43. 43.0 43.1 Ferris, Dan (2019-03-10). "How to Find Stocks That Thrive in a Bear Market". Stansberry Research. Archived from the original on 2020-10-29. Retrieved 2020-10-29.
  44. O’Connor, Brian J. (2019-10-11). "E.T.F. Investors Are Going for Gold, Despite Many Drawbacks". The New York Times. Archived from the original on 2020-08-09. Retrieved 2020-10-25. With stocks, I can come up with a good estimate for what a company is worth. The problem with gold is that it’s very difficult to figure out what it’s worth.
  45. Stocker, Frank (2014-05-02). "Das Orakel Warren Buffett versammelt seine Jünger" [The oracle Warren Buffett gathers his disciples]. Die Welt (in German). Archived from the original on 2014-05-02. Retrieved 2020-10-29.CS1 maint: Unrecognized language (link)

External links[edit]


Category:1973 births Category:American financial analysts Category:American finance and investment writers Category:American financiers Category:American investors Category:American financial writers Category:American financial commentators Category:American money managers Category:White Russian emigrants to the United States Category:American stock traders Category:University of Colorado Denver alumni Category:University of Colorado Denver faculty Category:21st-century American economists Category:Writers from Denver



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