One Chart Says It All

The chart above says more than a thousand words.

Adding to the Relative Valuation Narrative, value investors have seen the performance of value stocks trounced by growth stocks over the past 13 years, causing innumerable fund & hedge fund closures, which have further delayed a rotation into the most attractively priced value equities.  The price discovery process has ultimately been delays by seemingly never ending price insensitive and valuation insensitive fund flows.

The end result is that the most VALUE of the Value Stocks, which in the U.S. are largely commodity equities, have under-performed the broader markets by a substantial margin, creating a Tremendous Opportunity for Contrarian, Value Investors.

Believe it or not, the most out-of-favor, fundamentally undervalued commodity equities have under-performed even more than their representative ETF’s, and the traditional valuation ratios of these selective equities are so abnormally cheap that most market participants have not yet embraced these stocks as these market participants fear what is in the Rear View Mirror, while Looking Forward presents a dramatically different view.