In his latest Q42023 Letter, John Rogers anticipates a narrowing gap between mega-cap and small to mid-cap stocks as interest rates decrease in 2024 and beyond. His belief is supported by factors such as consumer confidence, stable wages, and sustained long-term economic growth. Despite market concentration, his 41 years of investing experience through various market cycles has taught him the resilience of fundamental investment principles.
Here’s an excerpt from the letter:
As the pendulum of worry swings from one scenario to another, our focus on recent headlines and macroeconomic developments is to consider their effect on the long-term intrinsic worth of our holdings over the next five-to-ten years.
As rates begin to subside in 2024 and beyond, we believe the gap between mega-cap stocks and their small to mid-cap counterparts will begin to narrow, fortified by consumer confidence, wages that are not likely to go down, as well as slowing, yet steady long-term economic growth.
Despite the continued concentration of the U.S. equity market, our 41 years of patient investing spanning five market cycles–the crash of 1987, the dot-com era, the global financial crisis, the U.S. debt downgrade and the Covid plunge–have taught us the fundamental principles of investing are resilient.
We believe the disciplined investor that stays the course and consistently owns differentiated, quality business models with robust balance sheets will outperform in the long run.
You can read the entire letter here:
John Rogers – Ariel Fund Q42023 Letter
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