Value is in the eyes of the beholder

Why have Value stocks delivered frustration while over-valued Tech and Growth deliver the big gains?

Well, this…

growth vs. value

And this…

ndx spx

Call it a bubble or call it the future now. My theory is that heavily indebted old guard companies are just not the go-to play in this seriously indebted economy. I don’t want to sound like a new age bubble head but the old rules are the old rules. Many or most of these ‘value’ companies are debt saturated. That’s why they pay dividends that Grandma loves.

I just read today that Apple comprises a huge piece of Buffett’s pie (40%? 50%?). He’s all excited about his new iPhone and has sworn off his flip phone, ha ha ha. Grandma and Grandpa will follow him into the 21st century.

Anyway, these charts tell us something generational is in process and they also tell us the age of ‘value’ is and has been over since 2007, especially with all that debt associated with it. There are legions of Grandmas collecting dividends on that crap that has established a trend of consistent under performance for too long to be called a bubble in its entirety.

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