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1/ Is there any way to make sense of growth's decade-long out-performance against value?
Polen Capital recently released a white paper that suggests this cycle might play out differently than the last time this happened in the late 90s, ending in the tech bubble.
Polen Capital recently released a white paper that suggests this cycle might play out differently than the last time this happened in the late 90s, ending in the tech bubble.
2/ In the paper, Polen notes that this out-performance was more driven by valuation in the 90s, but more driven by earnings growth in the past decade.
Another huge factor has been today's lower interest rates.
Another huge factor has been today's lower interest rates.
3/ Polen also looks at the fundamentals of the 10 most significant contributors to each the Russell 1000 Growth's and Value's performance over the last decade. These charts show the absolute change and growth in rev and net income for the top 10 largest contributors to each.
4/ Now compare to each of the indices' largest contributors in the 1990s.
5/ Polen concludes this is the natural result of realizing the full promise of digitization and the creation of successful digital ecosytems.
6/ The entire paper is not long and is worthy of a read. It frames the value vs. growth debate in way that's clear to understand and makes strong, rational case for why we've seen growth out-perform value over this past decade. Would welcome feedback. https://www.polencapital.com/perspectives/making-sense-of-value-vs-growth-dynamic
7/ For more on Polen's current portfolio, investing philosophy, and established track record of out-performance, see this thread: https://twitter.com/Matt_Cochrane7/status/1259105426785873921
