August Reporting Season: Early Signals

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Aug 22 2019

Dear time-poor reader: early beats and misses from corporate results, plus an update on global dividends.

In this week's Weekly Insights:

-Value & Growth, The Debate That Never Ceases
-August Reporting Season: Early Signals

-Rudi Talks
-Rudi On Tour

By Rudi Filapek-Vandyck, Editor FNArena

Value & Growth, The Debate That Never Ceases

Value investing is dead. Can I quote you on such?

The question recently was thrown at me via an avid podcaster & blogger. While rather amusing, I wasn't quite happy that such a controversial quote would be published with my name attached to it.

Because, slight detail, it isn't quite what I have been writing about all these years. So the invitation followed to provide a more accurate quote, upon which I wrote a few paragraphs. That then proved too much information for what was intended.

Long story short. I wrote the paragraphs below, from which a tiny amount was used in the blog. I think too many value investors get way too prickly when someone (as in myself) points out the obvious.

To set the record straight, here are my paragraphs:

"The debate about Value versus Growth style of investing seems to have made a decisive swing in favour of the latter in recent years with US data signalling Growth has now performed (decisively) better than Value in each of the past eleven years. In Australia a similar trend has established itself since early 2013.

The past 18 months in particular have proven too much of a challenge for many a typical Value investor. In response, many are pointing fingers towards easy money policies by the world's central bankers, or towards exceptionally low bond yields, and investors falling in love with modern day disruptors.

In my view, it is too easy to blame all of these factors. On my observation, many a typical Value investor has completely ignored the seismic changes taking place across the globe post GFC. These changes are not only highlighting the impact from disruptors, they are equally creating structural challenges for many of the companies whose shares today trade on cheap valuations.

This, I believe, is the real story behind the Value versus Growth debate. Grown up, intelligent and experienced men ignoring or refusing to accept that the world, yes indeed, has changed profoundly, and will continue changing for a lot longer.

Here is the blog:

I have suggested I am available for an intelligent, well-researched and educated discussion about why Value investing hasn't worked out well for many investors in recent years, including many professional funds managers.

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