- Market luminaries are openly questioning the enduring legacy of value investing in this seemingly unstoppable bull market led by the FANGs, HYDiS, and other speculative investment strategies.
- Perhaps value investing is too long-term and too low cost for a nearsighted, unnecessarily sophisticated financial services industry bent on justifying exorbitant fees and bonuses.
- But trying to predict trends, catalysts, and macro events that produce consistently profitable trades is mostly a fool’s game.
- Despite the noise, value investing will endure because value matters.
During the past several months, some prominent Wall Street players have questioned the enduring legacy of value investing or have outright declared its imminent death. And why not as we are enjoying a bull market for the ages where non-dividend paying growth stocks (FANGs), momentum trading, trend following, and high yield dividend equity (HYDiS) among other speculative portfolio strategies, are outperforming the more risk averse value approach.
But we think that investing in quality, dividend-paying companies at reasonable prices — whether from a growth or value perspective — endures well beyond the scrap heap where this market may ultimately dump the portfolios of investors that are chasing fast money in the euphoria of a post-Great Recession boom.
Thus, we believe value investing will survive as the superior investing strategy along with dividend growth investing not called HYDiS. Value investing is not dead. It is just camouflaged, with die-hard practitioners waiting in the bushes ready to pounce on the falling stock prices of otherwise enduring enterprises.
Here is Main Street Value Investor’s argument that value matters in all markets.