Value Stocks Have Never Been Cheaper

Value investing has been a losing strategy in recent years, and value stocks are currently trading at the steepest discount in history. This according to a recent article in MarketWatch. “There’s never been a worse time in history to be a value investor,” the article says, citing a recent comment by JP Morgan’s chief U.S. equity strategist, Dubravko Lakos-Bujas that “the relative price-to-book spread of the cheapest vs. the most expensive portfolio is at 9… Read More

Manager Says Stock Price Gap Signals Opportunity

The valuation dispersion occurring in the market is presenting the “opportunity of a decade,” according to a recent article in Bloomberg. The article reports that a portfolio manager at the Julius Baer Group says the historic spread between the most and least expensive stocks is presenting strong buy opportunities for investors. The article also quotes Kairos Pegasus Fund’s Federico Riggio, who argues that along with above-average earnings growth, the inexpensive segments of the equities market… Read More

The Monster of Uncertainty

This phrase was coined by a Dutch professor to describe how the scientific community views uncertainties in the natural world. In a recent Advisor Perspectives article, Scott MacKillop of Denver-based First Ascent Asset Management, relates the metaphor to the financial markets. Unlike in environmental science where there are hard and fast rules (gravity, planetary motion, and velocity to name a few), MacKillop writes, “All investment decisions involve an element of uncertainty. No matter how hard… Read More

Bloomberg Gadfly Kaissar Refutes Conventional Wisdom on Value Investing

We’ve seen growth stocks outperform value for a decade, says Bloomberg Gadfly Nir Kaissar, so some investors are thinking it’s time for the tide to turn. He cites evidence in the form of Bloomberg data showing that investors put $5.5 billion into value ETF’s and withdrew $6.2 billion from growth ETF’s so far this year. However, Kaissar points out, the adage that value stocks outperform during expansions and underperform during contractions just doesn’t hold up.… Read More

Will Value Stocks Ever Be Back in Vogue?

Maybe, but it seems the jury is still out. Data compiled by Bloomberg shows that value ETFs have taken in $5.5 billion in 2016, while growth ETFs have seen withdrawals to the tune of $6.2 billion. This could be a function of increased investor optimism, says Dan Miller of Boston-based GW&K Investment Management. “Value has done so poorly for so long and it’s under-owned among investors. All we need is for investor interest to pick… Read More

Four Conditions Reminiscent of 1999

Rob Arnott, founder and chairman of Research Affiliates, says that the recent market environment is reminiscent of 1999, just before the tech bubble burst. Writing in Barron’s, Arnott argues that the following four “conditions parallel the extremes of the late 1990s:” “Falling inflation expectations,” which Arnott argues “snap back in reasonably short order.” He observes that “after inflation expectations hit a basement low of 0.9% in December 1998, within six months they had jumped to… Read More