A recent Forbes article offers insights from an interview with M&R Capital Management CEO John Maloney regarding the current market outlook and where investors might find value.

Here are some key takeaways from the interview:

“Stock prices undoubtedly benefited from an unprecedented river of fiscal and monetary stimulus in 2020, which promises to carry over into 2021,” said Maloney, a “dyed-in-the-wool value investor.” He added that additional liquidity (by way of a second stimulus package) is likely to fuel even faster growth in 2022 but adds that this could lead to more muted equity returns than investors might anticipate, “as much of the gain in equity prices has already been pulled forward.”

Regarding the outlook for the big tech names, Maloney noted that in recent months market returns have shifted over to traditional value stocks (i.e., financials and cyclical businesses), a trend he expects will continue this year.  But he added that “This need not result in negative returns for the FAANG stocks,” noting that the big tech companies should continue to exhibit above-average secular growth.

On a possible reversion to value, Malone predicted that if economic growth “exceeds four to five percent, value will outperform growth.” He noted, “It has been a long time in the desert for value.”