Value vs. Growth Investing and the Future of Stock Prices
Thursday, November 2, 2023
12 - 1 p.m.
Virtual
Join us for a virtual event with Dr. George Athanassakos, founder and managing director of The Ben Graham Centre for Value Investing and the Ben Graham Chair in Value Investing at the Ivey Business School. In his presentation, Dr. Athanassakos will argue that the hefty average nominal and real stock returns experienced over the last 30 years are not going to be repeated in the next 30 years. Profit margins will be eroded going forward. Inflation will also be higher than what prevailed in the past 30 years and so are nominal interest rates—due to both higher inflation and higher real interest rates.
The effect of higher interest rates on stocks along with the erosion of profit margins will be predictably negative in contrast to the positive effect that lower interest rates and higher profit margins had on stocks over the last 30 years. The stock price of companies that enjoyed the fattest profit margins and benefited the most from low interest rates over that period, i.e., growth stocks, will face pressure. Value will outperform growth. Riding the ETF bandwagon will not work. Stock picking and fundamental analysis will be key to outperformance.