The Return Of The Rotation Missionaries

One of the things we will be highlighting in November is the emergence of two narratives that have finally managed to marginally peck away at the attention on China Trade War narratives – at least in the short run. One of them is the “Rotation from Profitless Growth” narrative. The other is the “What Would Impeachment (or President Warren) Do to Markets” narrative.

We will have a lot more to say about the growing commentary and missionary behavior here, but if you feel like WeWork’s (WE) IPO failure, some disappointments at Amazon (AMZN) and execution successes from the likes of Apple (AAPL) and Microsoft (MSFT) are being sold as a package story about quality, value and cash flow mattering again, you aren’t imagining it. We think a rotation trade IS being promoted by market missionaries, which is not exactly the same thing as the rotation actually happening, and neither of which is necessarily the same thing as trading on that observation being a good idea.

Of course, what people mean by quality and value varies wildly. The only universally accurate definition is “things with traits I like more than other investors do.” Still, when you walk through the zeitgeist, you start to get the picture of what a change in vernacular looks like. For example:

Articles about brands and competitive advantage in grocery store chains rank among the top 5 most linguistically connected articles today.

Kroger memo touts a ‘new brand’ and says ‘all will be revealed soon’ — here’s the full message [BI]

Articles with a lot of value investor-triggering language covering the energy sector do too.

Marathon Petroleum Provides Update On Strategic Review To Enhance Shareholder Value [BI]

What else is in the zeitgeist? Quoting “path to profitability” language anywhere and everywhere as the panacea for anyone who might think your favorite profitless revenue growth company might end up like…well, those other ones.

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