In their latest Q1 2021 Letter, Tweedy Browne discuss the near-term prospects for value investing. Here’s an excerpt from the letter:
Despite rising valuations, we continue to uncover attractively valued equities, as pockets of undervaluation still remain from the bifurcated markets of the last year. As value investors, we are encouraged by the rotation that began in earnest last November post the vaccine announcements, and are hopeful for what this may mean for future relative performance of value-oriented equities, and non-U.S. equities, which are less impacted by technology stocks.
Are the green shoots for so-called value stocks that have been appearing of late an indication that central bankers may finally be losing control of the bond market? Will rising inflationary expectations lead to higher interest rates that prove not to be transitory, and instead, hazardous for the value of longer-duration growth stocks? Will a vigorous vaccine-induced economic recovery supercharge the near-term earnings of “older economy” value stocks and their non-U.S. brethren? Will the COVID-19 virus ultimately prove to be a serendipitous top for technology stocks, at least in the near term? We simply cannot know the answers to these questions, but if one or more do come to pass, it could mean long-overdue redemption for value-oriented investors.
You can read the entire letter here:
https://www.tweedy.com/resources/library_docs/quarterly/FundCommentary%20Q1%202021%20-%20Final.pdf
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