by Dusty Miller
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by Dusty Miller
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October 11, 2023: Lofty valuations among most of the so-called “Magnificent Seven” stocks place a heavy demand on future growth for those stocks as a group. If history is a guide, failure to achieve those implied growth rates could leave investors sorely disappointed.
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We look at the extreme recent outperformance in momentum stocks and the resulting disparities in valuations between certain perceived beneficiaries of artificial intelligence and a growing set of very attractive valuations of high quality companies outside of that space. VIEW/DOWNLOAD
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We examine the mechanics of our cash-flow valuation approach, the source of returns for long-term investors, and how systematic rebalancing improves portfolio fundamentals, the ultimate driver of returns. VIEW/DOWNLOAD
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We look at the significant recent contribution to equity returns coming from valuation expansion in a historical context and what it might mean for forward returns. VIEW/DOWNLOAD
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The S&P 500 in our view is expensive, at levels that have proven perilous in the past, and is also concentrated beyond historical precedents. For those who have stayed with the broad market, is it time to move to Value? The reality is that the Russell 1000 Value is only marginally cheaper and also has concentration issues and a legacy of slower underlying fundamental growth. VIEW/DOWNLOAD
