Value Investing Having Its Worst Run Since The Financial Crisis – WSJ

Value Investing Having Its Worst Run Since The Financial Crisis – WSJ
By Andyhill8 (Andy Hill) [Public domain], via Wikimedia Commons

If you’re wondering why your value investing strategy is under-performing you’ll be interested in this interview by Charlie Turner at Your Money Matters and The Wall Street Journal’s Steve Russolillo regarding the current under-performance of value investing.

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Russolillo says value funds globally are on track to post their worst performance this year … relative to growth funds since before the financial crisis.

SALT New York: Canyon, Mudrick, Fortress And Sculptor On Finding Distressed Value

At the 2021 SALT New York conference, which was held earlier this week, one of the panels on the main stage discussed the best macro shifts coming out of the pandemic and investing in value amid distress. The panel featured: Todd Lemkin, the chief investment officer of Canyon Partners; Peter Wallach, the managing director and Read More

He goes on to say that growth stocks … the ones that have the momentum behind … the ones that just keep going up and keep defying the odds … are the ones that are significantly outperforming.

This trend is not new for value investors however Russolillo also says, this is the one huge caveat when we talk about this debate because … we’ve seen this play out time and time again … you go back to the great depression … you go back to the tech bubble and the late nineties and early two thousands … you go back ten years ago to the global financial crisis … and before these periods happened … you saw growth outperform so much to the point that people would say … oh value investing is dead it can’t come back it’s impossible … and sure enough … after you had those big market downturns … value is what tends to outperform when you have huge pullbacks or huge bear markets … and even after those bear markets you tend to see value again continue to do well.

Here is the complete interview:

Article by Johnny Hopkins, The Acquirer's Multiple

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The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates. It examines several financial statement items that other multiples like the price-to-earnings ratio do not, including debt, preferred stock, and minority interests; and interest, tax, depreciation, amortization. The Acquirer’s Multiple® is calculated as follows: Enterprise Value / Operating Earnings* It is based on the investment strategy described in the book Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations, written by Tobias Carlisle, founder of The Acquirer’s Multiple® differs from The Magic Formula® Earnings Yield because The Acquirer’s Multiple® uses operating earnings in place of EBIT. Operating earnings is constructed from the top of the income statement down, where EBIT is constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–earnings that a company does not expect to recur in future years–ensures that these earnings are related only to operations. Similarly, The Acquirer’s Multiple® differs from the ordinary enterprise multiple because it uses operating earnings in place of EBITDA, which is also constructed from the bottom up. Tobias Carlisle is also the Chief Investment Officer of Carbon Beach Asset Management LLC. He's best known as the author of the well regarded Deep Value website Greenbackd, the book Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014, Wiley Finance), and Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012, Wiley Finance). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law. Articles written for Seeking Alpha are provided by the team of analysts at, home of The Acquirer's Multiple Deep Value Stock Screener. All metrics use trailing twelve month or most recent quarter data. * The screener uses the CRSP/Compustat merged database “OIADP” line item defined as “Operating Income After Depreciation.”

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