EC Value Will Continue To Outperform?

“The object of skilled investment should be to defeat the dark forces of time and ignorance which envelop our future. The actual, private object of the most skilled investment today is ‘to beat the gun’, as the Americans so well express it, to outwit the crowd, to pass the bad, or depreciating half-crown to the other fellow.

“This battle of wits to anticipate the basis of conventional valuation a few months hence … does not even require gulls amongst the public to feed the maws of the professional; it can be played amongst the professionals themselves.  Nor is it necessary that anyone should keep his simple faith in the conventional basis of valuation having any genuine long-term validity.  For it is, so to speak, a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says Snap neither too soon nor too late, who passes the Old Maid to his neighbor before the game is over, who secures a chair for himself when the music stops.  The game can be played with zest and enjoyment, though all the players know that it is the Old Maid which is circulating, or that when the music stops some of the players will be unseated.” ~ John Maynard Keynes (h/t DerivativeMusings)

In this week’s Dirty Dozen [CHART PACK]  we discuss the implications of more fiscal on the market, then talk some inflation and what it may mean for the highly valued tech sector, before going over the continued outperformance of value over growth and end with an auto and Ag-tech play, plus more…

Let’s dive in.

***click charts to enlarge***

1.Stimulus will be hitting the checking accounts of the Redditt Brigade in the near future. According to a survey by Deutsche Bank and noted by Bloomberg, “Individuals age 25 to 34 with online brokerage accounts plan to use about 50% of their stimulus to buy stocks.”

As I wrote back in early Jan, fiscal is the ultimate cheat code for the economy and markets. This is a structural wave that we want to surf, not swim against. With that said, I expect there to be wide dispersion in returns across the market so pick your stocks wisely.

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William K. 3 weeks ago Member's comment

Quite an interesting article, but one disagreement, which is that "The Inflationists" have been at their demented game for much longer than a decade, although probably different words were chosen to disguise the activities.