Chart of the Week - Where's the Value?

Chart of the Week - Where's the Value?

"past results are not indicative of future returns"

The other day I showed a chart of the combined relative price performance line of Global Small Value stocks vs US Large Growth stocks. In case you didn’t see it, the picture is one of a 17-year long relative bear market...

US Large Growth has outperformed Global Small Value more than 5x over that period. Global Small Value sure must suck, right? Well, one consolation is a relative value trinity has emerged…

Small vs Large, Value vs Growth, Global vs US are all now trading at steep relative value discounts, as the chart below shows.

Investment product advertisements are always littered with “the past does not equal the future“ disclaimers, but in our context here those words actually mean something…

If you look back at the start of that 17-year relative bear market, across all 3 of those pairs, it was a starting point of relative overvaluation.

Let me state is simpler: in 2007 US large growth traded at a record discount vs global/small/value. Indeed it was those starting conditions that sowed the seeds for the stunning run in US Large Growth stocks. Now that a new extreme in relative value has emerged, the seeds are once again sown, but for something quite different.

The past will not be the future... $S&P 500(.SPX)$ $NASDAQ(.IXIC)$ $DJIA(.DJI)$

Image

https://twitter.com/Callum_Thomas/status/1772371401024135270

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In case you didn’t see it, the picture is one of a 17-year long relative bear market... </p><p>US Large Growth has outperformed Global Small Value more than 5x over that period. <strong>Global Small Value sure must suck, right?</strong> Well, one consolation is a <strong><em>relative value trinity</em></strong> has emerged… </p><p>Small vs Large, Value vs Growth, Global vs US are all now trading at steep relative value discounts, as the chart below shows. </p><p>Investment product advertisements are always littered with “the past does not equal the future“ disclaimers, but in our context here those words actually mean something… </p><p>If you look back at the start of that 17-year relative bear market, across all 3 of those pairs, it was a starting point of relative overvaluation. </p><p><strong>Let me state is simpler:</strong> in 2007 US large growth traded at <em>a record discount </em>vs global/small/value. Indeed it was those starting conditions that sowed the seeds for the stunning run in US Large Growth stocks. Now that a new extreme in relative value has emerged, the seeds are once again sown, but for something quite different. </p><p><strong><em>The past will not be the future...</em></strong> <a data-mention-id=\".SPX\" class=\"teditor-mention\" data-mention-name=\"S&amp;P 500\" href=\"https://ttm.financial/S/.SPX\">$S&amp;P 500(.SPX)$</a>  <a data-mention-id=\".IXIC\" class=\"teditor-mention\" data-mention-name=\"NASDAQ\" href=\"https://ttm.financial/S/.IXIC\">$NASDAQ(.IXIC)$</a>  <a data-mention-id=\".DJI\" class=\"teditor-mention\" data-mention-name=\"DJIA\" href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$</a> </p><p class=\"t-img-caption\"><img alt=\"Image\" title=\"Image\" src=\"https://community-static.tradeup.com/news/3c2fca7cca1917c353b8bfd307e215ab\" tg-width=\"680\" tg-height=\"445\"><span>Image</span></p><p> https://twitter.com/Callum_Thomas/status/1772371401024135270</p><p><br></p><p></p></body></html>","htmlText":"<html><head></head><body><p><strong>Chart of the Week - Where's the Value?</strong> </p><p><em>\"past results are not indicative of future returns\"</em> </p><p>The other day I showed a chart of the combined relative price performance line of Global Small Value stocks vs US Large Growth stocks. In case you didn’t see it, the picture is one of a 17-year long relative bear market... </p><p>US Large Growth has outperformed Global Small Value more than 5x over that period. <strong>Global Small Value sure must suck, right?</strong> Well, one consolation is a <strong><em>relative value trinity</em></strong> has emerged… </p><p>Small vs Large, Value vs Growth, Global vs US are all now trading at steep relative value discounts, as the chart below shows. </p><p>Investment product advertisements are always littered with “the past does not equal the future“ disclaimers, but in our context here those words actually mean something… </p><p>If you look back at the start of that 17-year relative bear market, across all 3 of those pairs, it was a starting point of relative overvaluation. </p><p><strong>Let me state is simpler:</strong> in 2007 US large growth traded at <em>a record discount </em>vs global/small/value. Indeed it was those starting conditions that sowed the seeds for the stunning run in US Large Growth stocks. Now that a new extreme in relative value has emerged, the seeds are once again sown, but for something quite different. </p><p><strong><em>The past will not be the future...</em></strong> <a data-mention-id=\".SPX\" class=\"teditor-mention\" data-mention-name=\"S&amp;P 500\" href=\"https://ttm.financial/S/.SPX\">$S&amp;P 500(.SPX)$</a>  <a data-mention-id=\".IXIC\" class=\"teditor-mention\" data-mention-name=\"NASDAQ\" href=\"https://ttm.financial/S/.IXIC\">$NASDAQ(.IXIC)$</a>  <a data-mention-id=\".DJI\" class=\"teditor-mention\" data-mention-name=\"DJIA\" href=\"https://ttm.financial/S/.DJI\">$DJIA(.DJI)$</a> </p><p class=\"t-img-caption\"><img alt=\"Image\" title=\"Image\" src=\"https://community-static.tradeup.com/news/3c2fca7cca1917c353b8bfd307e215ab\" tg-width=\"680\" tg-height=\"445\"><span>Image</span></p><p> https://twitter.com/Callum_Thomas/status/1772371401024135270</p><p><br></p><p></p></body></html>","text":"Chart of the Week - Where's the Value? \"past results are not indicative of future returns\" The other day I showed a chart of the combined relative price performance line of Global Small Value stocks vs US Large Growth stocks. 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