In his recent presentation at Natixis Investment Managers, David Herro discusses the catalysts for value investing in today’s markets. Here’s an excerpt from the presentation:
We know not only that has value been lagging but international value has taken it on the chin. We’ve had some of these things in our face like a strong dollar, slower growth, but again these things are reversing themselves.
There’s no rule that says U.S stocks always have to outperform stocks outside the U.S, in fact I think there’s a strong argument to make that the tables are starting to turn there.
So not only are we very well exposed as value investors but I think there’s an acute value opportunity in the international value space.
So what’s the case? The case is basically there’s an investment opportunity based on valuation differentials where there is a catalyst for these differentials to close. The differentials are big. We’re going into a period of stronger economic growth. I believe we’re going into a period of higher inflation and higher interest rates and these forces in the backdrop I think are extremely conducive to help close that valuation differential.
You can watch the presentation here:
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