Strategies · Core
Asset Growth Effect
Short high asset-growth firms and long low/negative growth — the investment/empire-building anomaly.
Definition
Sort on year-over-year total-asset growth (or investment/assets). Long low growth, short high. Related to Fama–French CMA. Issuance and M&A inflate the high-growth short.
Why it matters
Fast-growing balance sheets have historically underperformed. It is a quality/issuance cousin.
Case
A roll-up with 40% asset growth via deals. The short is the strategy — until the multiple holds for three more years.
How to read it
Organic vs acquired growth if you can. Financials’ sheets are a different animal — exclude or specialize.
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