Last week I attended the Early Retirement Masterclass by Christopher Ng. I was impressed with the course as it was based on sound academic research and equipped us with the skills necessary to adopt a data driven approach to investing. I will use one of Chris’s strategies to pick blue chip stocks as an example in this article. Primarily, Chris advocates the smart beta approach to fish out stocks based on certain factors such as price to earnings ratio, free cash flow yield, net profit margin and momentum. Stocks with low price to earnings ratios were chosen because they are cheap relative to their earnings. These stocks are undervalued relative to other stocks due to the market’s overreaction to bad news. This gives value investors the opportunity to take advantage of the low prices to make huge profits when the prices revert back to their fair value. Stocks with high free cash flow yield were...