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Where the value investing strategy still works

Losses have been brutal in US but strong gains have been made internationally since depths of Covid pandemic
The writer is founder and chief investment officer of Verdad Advisers

Trailing performance has not exactly been a selling point for value investment strategies in recent memory. As the last 15 years unfolded, a wave of bad performance has seen allocators shift remorselessly away from the strategy of investing primarily at undervalued companies to more growth-orientated approaches.

This has hollowed out the value investing community. As far as I can tell, the universe of value managers has shrunk to the aged whose records pre-2009 are strong enough to keep investors loyal, quants who trust the long-term data and cranks who are weirdly obsessed with natural resources stocks.

The recovery from the Covid pandemic now seems like a false dawn for the value community in the US, as artificial intelligence-mania swept the market in 2023 restoring the fortunes of the briefly embarrassed growth managers and punishing the briefly optimistic value managers.

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