On July 24th, I was back on the air with Greg Hebert for another Business@Night interview.

Greg and I discussed the top and bottom company’s on Fortune’s “America’s Most Admired Companies” list. Specifically, we discussed whether the stocks of admired companies outperform those of companies that are despised. Meir Statman et al covered this question in a paper titled “Affect in a Behavioral Asset Pricing Model”, which showed that a portfolio of despised companies significantly outperformed a portfolio of admired companies, rebalanced every 2, 3 or 4 years, between 1982-2006. The result of their study is not surprising given the overweighting of small-cap and value stocks in the despised portfolio vs. the admired portfolio.

We also discussed the common misperception, amongst investors, that high-quality, admired companies have lower risk but higher expected returns vs. despised companies. Please have a listen and provide any feedback you have below.