2/ Low rates make earnings far off in the future more valuable. Growth stocks offer more earnings in the future than value stocks, so low rates justify a widening valuation gap (until recently the gap was at historic levels)
3/ But as a GMO has recently argued, value investors actually make money from cheap stocks rerating until they are no longer classed as “value”. The wider the valuation gap, the bigger the rerating upside. This should offset the divergence in valuations. https://www.gmo.com/europe/research-library/the-duration-of-value-and-growth/">https://www.gmo.com/europe/re...
5/ Does this mean value really is broken or that the recent revival has much further to run?

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