This isn't a small point... If you are involved in the equity market and miss out on names like this, you're almost certainly going to massively underperform. The vast majority of returns comes from a small slice of names. And again, if you want to properly do value investing, you have to precisely understand the growth component of value, as well as the weird debt and cap stack situations that usually come with value names (the market is efficient and they trade at discounts for a reason).
I trade full time, and my personal long term account has no stock picking. Value or otherwise. The medium term acct does, but not the decade+ timeframe one does not. So ultimately I don't really know what to tell you. Picking the next NVDA is practically impossible, yet missing out on such a name destroys your relative returns against an impossibly simply approach (index investing). Therefore don't try. Simple conclusion.
If you are strictly focused on a very limited view of "value" such as free cashflow, asset value, and PE (which ignores important aspects like debt maturities, industry cyclicality, quality of internal compounding, etc), then you're frankly directly competing with private equity. The names that stand out on these terms get bought by private equity, and the scraps of "value" are left on public markets. PE has 500,000,000,000 in dry powder currently, and much more efficient access to Capital markets than you do, with the ability to lever up those easy "value" tilted cash flows many times and immediately sell the debt on to pension funds and such. Trust me, if the value opportunity was truly there, they would take it. What you're seeing on markets is fairly priced on a risk adjusted basis.
Just use an up to date factor overlay on top of efficient equity beta exposure if you want diversified value that won't pigeon hole you in weird value traps. Frankly. Figuring that out is going to be much easier than cracking the value investing code and somehow beating the index. I remember an interview from one of the smarter firm owners that I've heard and he uses "short junk" (which generates extra cash to deploy efficiently) to slightly lever up his equity portfolio while giving him a broad based value tilt (it's long short portfolios all the way down). Over a long time frame something like that is going to crush any form of stock picking for the vast majority of participants.
This isn't a small point... If you are involved in the equity market and miss out on names like this, you're almost certainly going to massively underperform. The vast majority of returns comes from a small slice of names. And again, if you want to properly do value investing, you have to precisely understand the growth component of value, as well as the weird debt and cap stack situations that usually come with value names (the market is efficient and they trade at discounts for a reason).
I trade full time, and my personal long term account has no stock picking. Value or otherwise. The medium term acct does, but not the decade+ timeframe one does not. So ultimately I don't really know what to tell you. Picking the next NVDA is practically impossible, yet missing out on such a name destroys your relative returns against an impossibly simply approach (index investing). Therefore don't try. Simple conclusion.
If you are strictly focused on a very limited view of "value" such as free cashflow, asset value, and PE (which ignores important aspects like debt maturities, industry cyclicality, quality of internal compounding, etc), then you're frankly directly competing with private equity. The names that stand out on these terms get bought by private equity, and the scraps of "value" are left on public markets. PE has 500,000,000,000 in dry powder currently, and much more efficient access to Capital markets than you do, with the ability to lever up those easy "value" tilted cash flows many times and immediately sell the debt on to pension funds and such. Trust me, if the value opportunity was truly there, they would take it. What you're seeing on markets is fairly priced on a risk adjusted basis.
Just use an up to date factor overlay on top of efficient equity beta exposure if you want diversified value that won't pigeon hole you in weird value traps. Frankly. Figuring that out is going to be much easier than cracking the value investing code and somehow beating the index. I remember an interview from one of the smarter firm owners that I've heard and he uses "short junk" (which generates extra cash to deploy efficiently) to slightly lever up his equity portfolio while giving him a broad based value tilt (it's long short portfolios all the way down). Over a long time frame something like that is going to crush any form of stock picking for the vast majority of participants.