Growth versus value is a rivalry as old as the stock market itself; is it better to buy stocks from companies with a dizzying potential for profit growth, or invest in companies that seem to be a cheap value with more modest earnings growth? For the last decade, growth has been the winner, hands-down, but now value has surged back into the game, reports an article in Bloomberg.

The S&P Pure Value Index has returned nearly 8% with dividends since mid-November while its growth counterpart, the S&P Pure Growth, has lost 25%. That’s after returning 650% over the preceding 12 years. That incredible reversal of fortune has caused an influx of $55 billion to value ETFs alone this year while $1 billion has drained from growth stocks. No wonder value money managers are feeling gleeful. But those managers should think twice before gloating, says Rob Arnott of Research Affiliates, “because we looked pretty stupid for a while,” he told Bloomberg. Arnott is staying focused on research, trying to discern why exactly growth outperformed value for so many years and find solid evidence to show that value’s outperformance can last just as long. While many growth devotees are waiting for their stocks to rebound, Arnott believes that value’s time in the sun could go on for many more years.

Many strategists point to interest rates as the reason for growth’s long reign; low rates bolster growth stocks with cheaper money that investors are more willing to risk. But Arnott points to inflation instead: inflation raises concerns for the future and makes planning more difficult for companies. He believes inflation is here to stay for a while, highlighting surging home prices (39% since 2019). Other analysts believe that growth stocks were fueled by tech companies purporting to disrupt their industries, making the Pure Growth index top-heavy with stocks that have fallen mightily since November, such as Nvidia and Tesla, down 43% and 37% respectively.

Growth is still 8 or 9 times more expensive than value, by Arnott’s calculations, and many on Wall Street don’t share his belief that value will outperform for long. There’s also the fear of “value traps”: stocks that appear cheap but whose businesses are crumbling. Inversely, now there are “growth traps”: companies that seem to have limitless potential but fail to live up to expectations. Still, in the ongoing rivalry between growth and value, many believe that value will dominate for quite some time to come, the article concludes.