“A similar story for value versus low-volatility stocks is prompting JPMorgan Chase & Co. to declare a ‘once-in-a-decade opportunity’ to bet on the unloved factor,” according to Bloomberg. “The yawning gulf represents ‘the largest relative valuation bubble in modern equity market history,” bank strategists wrote in a recent note.’”
Value stocks usually trade at lower prices relative to fundamental measures of value, like earnings and the book value of assets. On the other hand, growth-oriented stocks tend to run at higher valuations since investors expect the rapid growth in those company measures, but more are growing wary of high valuations.
“Some generational perspective might indeed be in order for investors who have thrown in the towel. When value stocks plunged to similar levels versus growth at the height of the dot-com bubble in 2000, they went on to surge more than 50% against their opposing cohort in the next 12 months, MSCI indexes show,” according to Bloomberg.
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