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Thread: Is value investing dead?

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    Default Is value investing dead?

    Is value investing dead? It might be and here’s what killed it

    KEY POINTS

    The long period of low interest rates is the first culprit to blame for the demise of value investing, according to AB Bernstein.

    “The outperformance of value might require higher interest rates, which could be structurally difficult to achieve in the foreseeable future,” said Inigo Fraser-Jenkins, Bernstein’s head of European quantitative strategy.

    Technology has disrupted industries in a way that may permanently destroy “moats” that used to exist around certain industries, the analyst said.
    https://www.cnbc.com/2019/06/21/is-v...killed-it.html
    Tom
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    I am not a Registered Investment Advisor. Do your own due diligence.


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  3. #2

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    Default Re: Is value investing dead?

    Value investing is really nothing more than making a bet on the companies that have been unfairly beaten down. Even though the opportune time to buy was late March to mid-April, a few bargains are still out there.

    What's always been a killer for me with value investing is many of the companies you believe are "values" ended up cutting their dividend.

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    Default Re: Is value investing dead?

    My individual stocks are (or were at one time) value stocks and have mostly underperformed the market rebound since March. The past few weeks I've noticed they are up more than the market on up days and down less on down days. Not sure if this is indicative a general move towards value picks, but something I've taken note of.

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    Default Re: Is value investing dead?

    It's been a very rough patch indeed. Hard to watch tech stocks with mediocre earnings and ESG stocks go up, up, up because the next 20 years are priced in while "normal" stocks insanely underperform.

    Value investing is suffering its worst run in at least two centuries after the pandemic compounded a decade of struggles for a popular strategy that consists of buying cheap stocks in often unfashionable industries.

    Research by Mikhail Samonov, the head of Two Centuries Investments, a quantitative fund manager, suggests the performance of value is now the worst since at least 1826 — the year former presidents Thomas Jefferson and John Adams both died. US stock market data only goes back to 1927, but Mr Samonov has gone back a century further using older, rougher data compiled by Yale finance professor William Goetzmann.
    https://www.ft.com/content/fc7ce313-...b-f883afc1e035

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    Default Re: Is value investing dead?

    S&P 500 sector weighting is overweight Information Technology and underweight Finance, Energy.

    In 2007 it was overweight Finance and Energy. This isn't bottom or top picking, but an observation in mean reversion.

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