With value investing now having struggled for over a decade, many are questioning whether the strategy has become permanently broken. In this episode we examine the arguments against value investing both from the perspective of a quant investor who builds value strategies and a financial planner who uses them. We look at the different types of value strategies and why value isn’t just buying the cheapest stocks. We then get into the arguments against value and discuss whether value’s popularity has destroyed its outperformance, if the Fed and market cycles have broken value and if technology’s dominance can explain the struggles of the past decade.
- 02:18 – Michael Mauboussin and the broad definition of value
- 04:39 – Graham, Buffett and Bill Miller value
- 06:01 – Value and the melting ice cube
- 10:13 – Putting the struggles of value in context
- 13:29 – Is multiple expansion still a thing?
- 15:28 – The widening of value spreads
- 17:15 – The voting machine and the weighing machine
- 22:29 – Value needs some good storytellers
- 24:33 – Why value investing works
- 30:25 – Did the Fed kill value investing?
- 33:54 – Value and quality
- 34:40 – Are there too many value investors?
- 36:41 – Has big data killed value?
- 37:50 – Is value a bet against technology?
- 42:26 – Has a less volatile economic cycle hurt value?
- 43:28 – Is value investing dead?
- 47:23 – How a financial planner views the value debate
