Just a little teaser post this one ... I've been doing some number-crunching on price-to-book values, and comparing what I find with a letter by Jeremy Grantham. My conclusion, backing up my previous post, is that value wont outperform in the near term. I hope to write up my reasoning tomorrow, which will take some time.
Stay tuned.
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Looking forward to it :-) But if you accept share prices have momentum then value usually underperforms in the short term. Cheap shares on the whole get cheaper if you're testing just, say, low PBV companies without any attempt to employ a timing statistic (like the good old F_Score).
That's why so few people do it (it's painful), which is why there is an opportunity to make outsized profits in the long-run.
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