As Dan Weiss writes, we have seen the market undergo a radical shift since midyear. The first-half darlings are so far 2nd-half disasters, and vice-versa. As Dan says, there is no way to know if this is the start of a long-term trend or just another bear market spasm.
One group of investors who is certainly counting on a long-term shift, whether now or later, is value investors. The recent performance of value managers with long-term records of trouncing the market has been awful. Gurufocus.com reports that market legends like Marty Whitman, Monish Pabrai, and Robert Rodriquez have seen recent stock picks pounded by the market to the tune of more than 30%. Many other similarly decorated value managers have also seen painful declines. Bill Miller, Wally Weitz, Bill Nygren, Chris Davis, the list goes on an on.
Each of these managers continues to experience major asset outflows. Are these outflows justifed? Is value dead? Have all these guys who used to be so darn smart suddenly become dumb? Were they all just lucky?
Let’s look at the facts.
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