"The Quality Dimension of Value Investing"
Original Article by Robert Novy-Marx of the Simon Graduate School of Business: University of Rochester
"Buying high quality assets without paying premium prices is just as much value investing as buying average quality assets at discount prices. Strategies that exploit the quality dimension of value are nearly as profitable as traditional value strategies based on price signals alone. Accounting for both dimensions by trading on combined quality and price signals yields dramatic performance improvements over traditional value strategies. Accounting for quality also yields significant performance improvements for investors trading momentum as well as value."