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BlackRock Quant Sees Stock Valuation a Mystery Not Worth Solving

  • Comparing share prices to fundamentals is futile, Shen says
  • His team scours reams of alternative data for trading signals

BlackRock Inc.’s senior quant has bad news for the likes of Bill Gross and Cliff Asness wagering on a comeback for value stocks.

In the worldview of Jeff Shen, money managers need new investing methods because there’s no way to tell if betting on ostensibly cheap companies will work again. In fact, comparing share prices to fundamentals like corporate profits or book value is essentially futile in complex markets.