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Rekenthaler Report

Is This Time Different for Value Investors?

Jeremy Grantham broaches the subject.

Optimists and Pessimists
For growth-stock investors, every day is a new beginning. There are always fresh industries to be invented, monopolies to be created, record profits to be earned. The growth-stock buyer is the child on Christmas morning, bounding down the stairs, wondering just what delights lie under the tree. Or the puppy, tail wagging, ready to step outside that door and explore what the world offers.

No such delights for value investors. They know what awaits their eager rivals: bitter disappointment. Santa's gift turns out to be a hand-knit scarf that looks suspiciously like Aunt Edna's hat. The puppy is yanked by his leash and is never permitted to catch the squirrel that taunts him. And that sure-to-succeed cupcake chain goes bankrupt, outdone by donuts.