The Great Value Comeback (II)

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  • Value Insights

In our previous paper, we have addressed last decade’s issues for value investors as well as the rationale behind value investments. In recent years, money has fled to growth stocks, boosting their prices while seemingly ignoring attractively priced companies. Even though, in the long run, empirical evidence suggests that value tends to outperform, periods such as the current one are nothing unusual. As explained in July, investors tend to extrapolate the past too far into the future, shy away from perceived risk and incentivize their money managers to avoid relative underperformance. Altogether, we demonstrated that value is not an elusive concept, but that the reasons for historical outperformance are deeply rooted in human behavior, risk attitudes as well as agency risk. For these factors, no change is in sight – convincing us that value will continue to deliver attractive returns going forward.

Part II of this series provides a more in-depth view of the current market situation, the drivers for value, possible reasons for its recent performance as well as a brief look into the bright future ahead.


Goran Vasiljevic

Managing Director (CEO, CIO)


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