The Meb Faber Show - Better Investing
Robeco’s Matthias Hanauer - Think Value Investing Is Outdated? Think Again | #561
Dec 13, 2024
In this conversation, Matthias Hanauer, a researcher with Robeco’s Quant Equity Research team, delves into the evolving landscape of value investing. He reveals how interest rates shape the relationship between growth and value stocks. The discussion highlights the promise of emerging markets and small-cap stocks, as well as the impact of recent U.S. elections on market trends. Matthias also explores the intriguing 'Factor Zoo' and the integration of machine learning in modern investment strategies, challenging conventional wisdom on value metrics.
46:52
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Quick takeaways
- The revival of value investing highlights its cyclical nature, demonstrating that market conditions and valuation metrics significantly influence its performance over time.
- Integrating machine learning into investment strategies can enhance factor-based models by identifying complex relationships within financial signals, though caution in application remains vital.
Deep dives
The Value Factor's Resurgence
The discussion highlights the revival of the value investing approach after a prolonged period of underperformance. In 2020, value investing was perceived as ineffective; however, subsequent data showed a significant recovery of value stocks contrasted with growth stocks. The long-term performance analysis reveals a cyclical nature, with drawdowns in eras like the dot-com bubble and recessionary periods. A critical examination of valuation metrics and contrasting financial ratios provides a framework for understanding the enhanced valuation's enduring relevance.
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