Markets stocks

‘It’s All One Trade’: One Bank Declares Value Investing ‘Dead’

By now, you know the story -- or at least you should. If value, as an investment style, was already dead, the pandemic buried it. ("Does anybody want to say a few words?") That's rather macabre, but it's true. Just ask some value investors. Or consult any of the myriad visuals one can produce to illustrate the point (figure below). This is the discussion outlined comprehensively in "The Only Debate That Matters". Every rotation out of secular growth winners and into cyclical value laggards is generally described using adjectives like "nascent" and "burgeoning". That's because, after years of head fakes, nobody is willing to say, definitively, that value is back -- that any rotation is sustainable -- that finally, at long last, a durable shift is afoot. It seems as though something always intervenes to short-circuit these nascent regime shifts. For example, late last year, many were convinced that with the “phase one” US-China trade deal in place, and central banks having spent the better part of 2019 pivoting back towards accommodation, the stage was set for a strong rebound in global growth and inflation, and thereby a pro-cyclical rotation within equities accompanied b
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5 comments on “‘It’s All One Trade’: One Bank Declares Value Investing ‘Dead’

  1. runamok says:

    Value is dead. I guess it will be this way for the next 1,000 years.

    Value stocks didn’t lose 30% the last three trading days. I have no problem stuffing some NAV into “value stocks” like good utilities companies that cough up 4%+ per year.

    The market narratives as always seem to take as much money from people as possible. Look at Dave Portnoy. The poor guy lost $4M the last few days.

    • With solar energy trending towards less than 1 cent per kwh. I would not consider Utilities value but dinosaurs ripe for slaughter by the lilliputians. However if long term cash flows have infinite value then value stocks should excel. No I think a different explanation is obvious. This is a momentum trade pure and simple. The kindling is having enough cash to buy stock to set off the momentum trend.

  2. joesailboat says:

    Value as a bond proxy.

  3. JimmyBoy says:

    So this tech sell-off should be bought and ignore the recent outperformance in value? Is reversion to the mean also dead?

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