Think About This
INVESTMENT RESEARCH
EXECUTIVE SUMMARY
We think the recent rotation into ‘ Value ’ type stocks and out of ‘ Growth ’ type stocks is only the prelude of a structural shift that will advance in waves and will last into next year .
This advance will track the news on the biggest vaccination program in history , played off against the economic air pockets created by COVID infections and haggling about stimulus .
Regardless , the longevity of the underperformance , and the valuation disparity , makes the swell irresistible ; the opportunity is a sizable one .
The biggest risk we see to equities is Democrats taking both Senate seats in Georgia . This is unlikely , but if it did occur the rotation out of ‘ Growth ’ into ‘ Value ’ would only accelerate . Stimulus would support consumption but it would also keep pressure on tech stocks .
Our other big message is that ’ Value ’ stocks are a mixed bag . Many are cheap for good reason . To benefit from the identification of true value the ‘ Value Investing ’ process needs upgrading .
So brush off your copy of Graham ’ s ‘ Intelligent Investor ’ but tighten the scope and adjust for intangibles . Look in the bargain bin , but know there is a lot of junk in there .
www . deltecbank . com Deltec Bank & Trust Limited