In his Q3 2019 Market Comentary, Bill Miller, of value investing firm Miller Value Partners say’s there are signposts (as in the Twilight Zone) that we could be on the cusp of a regime change that will favor value investors. Here’s an excerpt from the letter:
The first few weeks of September saw a powerful move into long-underperforming value stocks and out of the momentum names. The dominance of the latter over the former had reached extremes last seen at the end of the internet bubble of late 1999.
I have no idea whether we are on the cusp of a regime change that will favor long-suffering value investors over the growth and momentum crowd, but there are signposts along the way (as in the Twilight Zone). The yield curve, whose inversion raised fears of an impending recession, has now de-inverted. If it continues to steepen, that will signal reduced fears about growth and support lowly valued names. A trade deal with China and a Brexit deal, or at least a Brexit that is less messy than feared, would also support more cyclical value names.
You can read the entire commentary here: Bill Miller – Q3 2019 Market Commentary.
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