Value Investors Struggle–What Happened?

IWY “Value” shares (Brown line) vs. IWF “Growth” shares

What is going on? https://www.threepartadvisors.com/audio

Active Managers Horizon Kinetics  Worth a careful read.  Note the underperformance of several famous investors.   Did they ALL become stupid at the SAME TIME?

Indexation-The-Jury-is-Almost-In

Perspective Jesse Felder Chartbook July 31 2018 (1)

Perhaps a way to beat the ETF driven overvaluation is to search for companies that are in few indexes such as TPL or CVEO, for example.  And search for owner-operated companies. Owner_Op_Paper  With founder or owner-operated companies, there is less float so fewer of these companies end up in ETFs.   When you see that Blackrock is a majority owner in a stock that you own but the stock represents only .003% of their five trillion dollar portfolio, you have a festering problem.   Look for those founder led companies that treat shareholders fairly:

https://youtu.be/WDWQXaqsyr8  Berkowitz of Fairholme speaks to students.  My gosh, the interviewer is irritating.

 

 

 

3 responses to “Value Investors Struggle–What Happened?

  1. > Perhaps a way to beat the ETF driven overvaluation is to search for companies that are in few indexes such as TPL or CVEO, for example

    This is exactly why I only invest in value opportunities in small or micro caps, because the ETF coverage (and thus the institutional knowledge) is low. You can’t know more than a cadre Goldman Sachs analyst, so why play in the same field as them?

    • You’re absolutely right. It makes no sense for a small, individual investor to look at big companies, if they’re willing to put in the amount of time required to do proper analysis.

    • I agree that you should look where you can gain an edge and where there is the most mis-pricing.

      But I don’t buy the argument that Goldman Sachs knows everything. They herd like all analysts https://youtu.be/Cxjdj5_5yNM

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