In his latest 2022 Market Perspective, Bill Miller says the rotation to value has begun. Here’s an excerpt from the perspective:
Where does all that leave us? Even after last week’s move, stock prices remain down year-to-date, and I believe there are many good values in the market. I also believe that a strong US economy with low unemployment, plentiful jobs, rising wages, the strongest real growth in many years, and a Fed that has begun to raise rates makes it likely that a rotation to value stocks from the growth stocks that led the market for the past 10 years has begun.
Other attractive areas in my opinion are energy (whose prices do not reflect oil even in the $70s, much less over $100), Chinese stocks (whose valuations appear too low, particularly when the government is easing and says it wants to help the market), financials (which mostly benefit from rising rates), housing stocks (whose valuations in the low- to mid-single digits do not reflect even a modest continuation of the current fundamentals), as well as travel related names such as airlines and cruise ships (which should see years of strong demand due to robust consumer balance sheets and a solid economy).
Mega-cap tech leaders such as Amazon and Meta are also attractive. Finally, looking at a basket of names down 50% or more from their 52-week highs will likely uncover some long-term bargains.
You can read the entire review here:
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