The coronavirus crisis has reordered expectations and valuations in global markets, but searching for the deepest discounts (based on negative return) delivers a familiar result: the commodities realm continues to offer the darkest shade of red.
The concept of value investing generally, thanks to weak results, has come under renewed scrutiny, again, in recent history. By some accounts, the notion of buying assets on the cheap and expecting to earn a relatively high-risk premium for the effort has become null and void in the 21st century. Die-hard advocates of the value factor respond: Baloney! We’ve been here before and value’s dry spell will, once more, give way to its historical pattern of generating high absolute and relative returns to patient investors willing to tolerate short-term pain. By that reasoning, overweighting value, in one or more of its various guises, will continue to provide opportunities for portfolio design and asset allocation.
While we wait for Mr….