Value investors have been suffering more than their fair share over the last decade. Using Kenneth French’s data on US stocks, the 20% cheapest US stocks by price-to-book value have underperformed the 20% most expensive US stocks for more than a decade now. At the end of this month, the underperformance of value stocks vs. growth stocks will have lasted 12 years, equalling the current record of underperformance from January 1951 to January 1963. However, the current spell of underperformance will undoubtedly last much longer than the underperformance in the 1950s. After all, in January 1963, value stocks had caught up with all their underperformance vs. growth stocks of the past, while as of February this year, value stocks were still 38% under water compared to growth stocks.
Value investors have to suffer - a lot
Value investors have to suffer - a lot
Value investors have to suffer - a lot
Value investors have been suffering more than their fair share over the last decade. Using Kenneth French’s data on US stocks, the 20% cheapest US stocks by price-to-book value have underperformed the 20% most expensive US stocks for more than a decade now. At the end of this month, the underperformance of value stocks vs. growth stocks will have lasted 12 years, equalling the current record of underperformance from January 1951 to January 1963. However, the current spell of underperformance will undoubtedly last much longer than the underperformance in the 1950s. After all, in January 1963, value stocks had caught up with all their underperformance vs. growth stocks of the past, while as of February this year, value stocks were still 38% under water compared to growth stocks.