Quantitative Value

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

Gray and Carlisle build a provocative argument in «Quantitative Value»: that statistical models systematically outperform human judgment in value stock selection, even when that judgment belongs to seasoned fund managers. The book begins with a critical revisiting of Graham's classical thesis — the investor in cheap companies with a margin of safety — and subjects it to the filters of modern quantitative evidence. The result is a stock-selection system anchored in business quality metrics (franchise durability, balance sheet strength) combined with cash-flow and EBIT/EV valuation. One of its most valuable chapters dismantles the perceived «magic» of Joel Greenblatt's formula, showing that its return-on-capital component adds less than it appears; the real driver is cheap valuation. The book demands fluency with financial accounting and is formula-dense, which limits its audience. Its greatest contribution is demonstrating with data that systematic discipline — even imperfectly applied — frequently beats the emotional discretion of human portfolio managers in competitive markets.

Key takeaways

• Quantitative models statistically and consistently outperform experienced discretionary managers in value stock selection.
• Business quality — franchise durability and balance sheet strength — must be integrated into any value-based selection system.
• The EBIT/EV ratio is a more robust valuation metric than the classic P/E when comparing companies with different capital structures.
• System discipline eliminates emotional bias — its single greatest advantage over discretionary management in efficient markets.

Fact

The book was originally published in 2012 by Wiley Finance, with an expanded second edition released in 2021.