The Great Value Comeback (I)

  • by
  • Value Insights

The last decade and specifically the first six months of 2018 have been an atrocious period for value investors. The one man’s loss is another man´s gain; to no surprise, other styles, like growth, experienced outstanding returns. The recent low growth, low interest rate, low capital expenditure environment and extensive monetary policy has largely benefited growth stocks and led to considerable headwind for value stocks. However, we should not assume that trends are meant to be broken for the winner from yesterday, in particular when it comes to the world of investing. Nevertheless, we do not believe that one stock, sector, country, or style will inevitable always outperform, why would it? The sources of returns are the expectations and uncertainties imbedded in valuations. Focusing on valuation (value investing) rather than lofty growth assumptions has in the long-run outperformed other styles by a large margin. Major headwinds, which have led to large valuation advantages for value stocks, are turning the tide, which offers great opportunities for future outperformance. Now it is time to trust the process.

“Investing is simple, but not easy” Warren Buffet, Value Investor

Investing is by no means easy; however, at the end of the day, it is simple. Focus on what matters, accept that many roads lead to Rome, and accept that sometimes you will look like dumbest guy in the room and sometimes like the brightest. Occasionally this happens for the right reasons but now and then it will happen due to noise in the market. The questions we must pose ourselves are: Should we now assume the market to be knowledgeable enough to trust it to lead the way and give up on value investing? Do high valuations, which equal high expectations and low uncertainty really reflect the future for most companies in the market correctly? Every investor, and therefore the market, is vulnerable to the danger of succumbing to the temptation of acting pro-cyclical and thereby adapting his approach at the worst possible time. Especially in times of underperformance it is important to continue following your beliefs, given that they are based on solid fundamental reasoning.


Goran Vasiljevic

Managing Director (CEO, CIO)


Go back

We use cookies on our website. Some of them are essential, while others help us improve this website and your experience. More information about the Privacy Policy
Change settings

Information regarding limited distribution

The English translation is only for the purpose of convenience.

The information on this website is not intended for people and companies located in regions where Lingohr & Partner Asset Management GmbH is not authorized to advertise or sell products or offer services. In particular, this information is not intended for distribution in the United States of America (USA), for citizens of the USA or for persons resident or domiciled in the USA or persons acting on their behalf. The content shown is for informational purposes only. In particular, it does not constitute an offer to sell, purchase or subscribe to other assets. In the event that a person, whose residence or office is located abroad, is able to access the website of Lingohr & Partner Asset Management GmbH and the information contained within, Lingohr & Partner Asset Management GmbH does not accept any guarantee or liability that the information contained complies with the relevant applicable legal provisions of the respective country.

Information regarding usage

The English translation is only for the purpose of convenience.

The use of the Insights page of Lingohr & Partner Asset Management GmbH is only permitted for institutional investors. The information provided in this area will be treated confidentially and is only intended for authorised third parties. The obligation to maintain confidentiality does not apply to information that is generally accessible. All publications contained in this area are for information purposes only and do not constitute investment advice or an invitation to buy or sell securities or other financial market instruments. All information and data in the publications are taken from sources that the publisher considers reliable and trustworthy at the time of writing. The publications contain only a non-binding and subjective opinion on market conditions and the investment instruments addressed at the time of publication of this publication.