IUS - Trees Do Not Grow To The Sky
2025-02-13 07:50:00 ET
Summary
- As equity investors, we look for companies that have been sold down to well below their intrinsic business value.
- Global value investors are facing down two extremes: frenzied US stock market momentum and a large valuation premium for US stocks versus the rest of the world not seen in 30 years.
- The two trees—extreme US market momentum and the divergence between the US versus the rest of the world—have grown high into the sky, likely well beyond their natural limits.
By James J. Clarke
At the core of our value investing philosophy is the concept of regression to the mean. Let us start by grounding that in some foundational economic concepts. We also will complement the explanation of regression to the mean as nature practices it....
Trees Do Not Grow To The Sky