Investing
Value Investing is Valuable Again
I finally get to analyze companies again
The world of passive investing is now dead. It’s time again for the stock picker and the person who has the process. Value investing has been struggling to survive but, when the economy was fueled with cheap and easy money, you didn’t really have to hunt for value. All you needed to do is ride the wave of liquidity. Stock picking was like throwing darts on a board full of names because no matter what you bought, chances are it was going up. But, that’s no longer the case.
We’re probably done with the 13-year boom of cheap credit and easy money. The bear market of 2022 has taught many new investors a valuable lesson. Stocks don’t always go up.
And this is the time when people with skill will need to make a come back. This is the time when it becomes important again to understand what drives a company and where numbers could go.
The asset managers and analysts who’ve come of age after the Great Financial Crisis have not been exposed to the same degree of skill and learning. I’ve seen this in corporate banking as well. There’s less emphasis on learning and more emphasis on numbers. And guess what? Making numbers in a bull cycle is wasn’t all that challenging.
