In his recent interview on Bloomberg, Ken Griffin explains why value stocks will outperform growth. Here’s an excerpt from the interview:
Griffin: For our entire adult lives we’ve lived by and large… this is an uneven set of benefits, but we’ve lived through the benefits of globalization which has been incredibly impactful in reducing the cost of goods.
Now we know some of the impacts this has had on towns with single manufacturing businesses that have been shut down and destroyed by offshoring.
But as we roll back globalization, as we go to more insourcing, we’re going to see that huge benefit of trade dissipate which has been so helpful in containing inflation rates. That’s inflationary.
So again you’ve got these two inflationary problems you’ve got a shortage of people in the workforce, you’ve got this impact of deglobalization that causes this inflationary environment that we’re in, that’s going to cause the Fed to have to raise rates and at some point we’re going to go from a negative real rate environment to a positive real rate environment.
The stock market is seeing that play out, they’re forecasting that, and they’re incorporating that into stock prices so stock prices go lower, growth stocks go much lower, value stocks outperform growth.
You can watch the entire discussion here:
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