Reuters Calls It: “Growth Stock Days Are Gone, Value Back In Play”

Friday, November 2, 2018
By Paul Martin

by Tyler Durden
Fri, 11/02/2018

Thomson Reuters research desk is ringing the proverbial bell in the stock market, saying “growth stock days are gone, value back in play.”

The report underlines how the latest leg of the most-extended bull market: buy the f*cking dip (BTFD) for growth stocks paid off, massively.

For more than five years, BTFD for shares of fast-growing companies like Facebook, Amazon, Netflix, Google (FANG) worked out very well, beating their value rivals by a margin of more than two-for-one in that span.

Until November came around.

Reuters said the wheels have literally “fallen off that profit vehicle.” The Russell 1000 Growth Index, which tracks stocks that trade at high multiples relative to their earnings, entered correction territories and or bear markets in October, warning that it was one of the worst months since the Great Financial Crisis. In that same period, the Russell 1000 Value Index is down only 7%.

“That shift was cast into sharp relief last week after major revenue shortfalls reported by both Amazon and Alphabet triggered the largest drops in their stock prices in years. Nasdaq, stacked with growth names from the tech sector in particular, is in a full-fledged correction – the term for a fall of at least 10% from the most recent peak.”

The Rest…HERE

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