Dec

21

After looking at some Fama French data it would seem to me that Value tends to outperform in periods where the Fed's monetary policy is in disarray. [web site ]

The inflation of 1970-1984 seemed to play into the hands of W. Buffett, whose strategy could perhaps be best defined as buying companies that could raise the cost of goods to the public. Often he was right that there was much less competitive pressure for price than the company leaders had come to believe, perhaps a misperception that evolved through territorial battles that were basically over but still being fought in the minds of these executives.

Now we are in a period of deflation, where feds are trying to prop housing prices up, to save the TBTF banks. It would seem that in such a risk adverse environment, "value" would again out perform growth. But what is the "new value" proposition that will put value companies strategy ahead of their peers?

One thought is that it is high cash with strategy of maximizing high intangible assets (people/ideas).


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