Undervalued Stocks Soared, but Not Because They’re Undervalued
This WSJ article, which discusses the recent surge in value stocks, caused us to run the position performance report on our clients’ holdings since May 15. We find it notable that over the past month, value stocks, both foreign and domestic, along with small and small value stocks, have had a huge surge. It’s interesting to see the S&P 500 at the bottom of the list for once.
And we agree with the position the article attributes to Nobel Laureate, Gene Fama, who helps guide the work of DFA (Dimensional Fund Advisors), that these categories are appropriately priced by an “efficient” market based on their risk (which is why the title of the article suggests that they’re not “undervalued”). Enjoy!