John Rogers, co-founder and chairman of Ariel Investments, spoke with Bloomberg about the shifting market landscape and the enduring value of small and midcap investing.
“We’re still finding ideas in the small value space. You know they really have been ignored. They’re kind of the ugly ducklings when you compare it to Nvidia and Apple and all these giant exciting growth stories,” he said.
For Rogers, the neglected nature of smaller companies represents opportunity. “The little mundane businesses that we’ve invested in for 42 years just seem particularly orphaned these days. So, we’re seeing great ideas and excited to be doing the research and think there’s real opportunity for small value.”
While large-cap technology stocks continue to dominate investor attention, Rogers sees enduring potential in steady, tangible businesses.
He also believes that shifts in consumer behavior are creating new long-term themes, particularly in entertainment.
“Everywhere we go, we talk to as many experts as we can as part of our regular research and due diligence, and everyone is saying, post-COVID it really is sticking that the next generation of citizens here, particularly in America, love experiences,” he noted.
“They want to go out and be together to watch a ball game, watch a movie, go to a concert, go to an outdoor stadium to see music. It’s something that is really, I think, here to stay.”
Rogers pointed to experiential venues like the Sphere in Las Vegas as examples of the kind of innovation that can drive lasting demand. “Places like the Sphere that have this magical IP, people want to come and experience it together. And I think it’s really special,” he said.
“The Wizard of Oz is just scratching the surface. It’s absolutely amazing and exciting to go to, but there will be other exciting amazing things. Everyone speculates, well, maybe one day, it could be Star Wars, maybe it could be Harry Potter. You never know what could be next.”
On the topic of his investment in Paramount, Rogers remains cautiously optimistic. “It’s been a torturous experience. I still think for sure there’s a lot of value there. Paramount Studio is valuable. CBS is valuable,” he said.
“They have these extraordinary assets and so the stock I think is still significantly undervalued.” However, he acknowledged the challenges of competing against giants like Netflix, Apple, and Amazon. “Whether you can grow in that environment is something that’s really still an open question.”
He also sees potential in strategic consolidation. “I think that acquisition makes a lot of sense. It brings scale as you suggest. It’ll make them one of the major players that will be there forever,” he said of a potential Warner Bros. Discovery tie-up. “There’s huge synergies, huge cost cuts that are available.”
Despite volatility from tariffs and political noise, Rogers remains hopeful about both the market and his home city. “None of us that work in the markets day-to-day like to see the volatility. We don’t like to see the surprises. We’re looking for stability,” he said. Yet his conviction in opportunity remains clear: “I think it will continue and I think it will expand… you’re just going to see one deal after another.”
You can listen to the entire interview here:
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