Joseph Piotroski

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Joseph D. Piotroski is an American professor of accounting at Stanford University's Graduate School of Business and a Senior Fellow at the Asian Bureau of Finance and Economic Research (ABFER). Professor Piotroski was the inaugural Center for Global Business and the Economy Research Fellow at the Stanford GSB. Prior to joining the faculty at Stanford in 2007, Professor Piotroski was an associate professor of accounting at the University of Chicago Booth School of Business (1999–2007). [1]

Professor Piotroski specializes in accounting and financial reporting issues, and is known in the investing world for an influential 2000 paper he wrote while at the University of Chicago, entitled Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers. In the piece, Piotroski laid out a way (Piotroski F-score) to buy and short stocks using several accounting-based criteria. His back-testing showed that the method would have produced returns well above the broader market averages over a two-decade period. [2]

Professor Piotroski is a member of the Editorial Advisory Boards of The Accounting Review, the Journal of Accounting Research, and the Journal of Accounting and Economics. His research has been cited in publications such as Bloomberg BusinessWeek, SmartMoney Magazine, and Investor's Business Daily[1]

Education and early career[edit]

Piotroski earned a B.S. in accounting from the University of Illinois in 1989. He became a certified public accountant in the state of Illinois that same year. From 1989 to 1992, he was a senior tax associate at Coopers & Lybrand.

Piotroski earned an M.B.A. in finance from Indiana University in 1994 and earned his Ph.D. in accounting from the University of Michigan in 1999. In 2000, his dissertation won the American Accounting Association Best Dissertation Award, Financial Reporting Section.  [1]

Value investing research[edit]

Piotroski received widespread publicity within the investment community for his 2000 paper, Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers, which appeared in the Journal of Accounting Research (Vol. 38, Supplement: Studies on Accounting Information and the Economics of the Firm).

The paper examined whether a simple accounting-based fundamental analysis stock selection strategy, when applied to a broad portfolio of high book-to-market firms, could impact returns for investors. He began by limiting his search to firms whose book/market ratios (the inverse of the price/book ratio) were in the top 20% of the market. He then ran those firms through an array of tests involving their balance sheets and income statements, using such metrics as the return on assets rate, current ratio, change in gross margin, and change in asset turnover. The Piotroski F-score is a 9-point valuation metric derived on this research.

Through back-testing, Piotroski found that buying the top stocks in the market according to his methodology and shorting those that got the worst scores would have resulted in 23% annualized gains from 1976 through 1996, more than double the S&P 500 broad market index return. His findings were made available to a wider audience via SmartMoney magazine and Bloomberg BusinessWeek.


  1. ^ a b c Stanford University Graduate School of Business – Faculty Profiles – Joseph D Piotroski Archived 2010-07-10 at the Wayback Machine
  2. ^ Piotroski, Joseph D. (January 2002). "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (PDF). The University of Chicago Graduate School of Business. Retrieved 25 January 2013.

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