At Hoover Capital Management (HCM), we’ve always championed the principles of value investing. Our commitment is rooted in the belief that focusing on fundamentally strong companies with undervalued assets leads to sustainable long-term growth. This belief is further reinforced by a recent analysis of the French High Minus Low (HML) factor, which highlights the historical performance of value versus growth stocks, as shown below:
The data, spanning an impressive 97 years from July 1926 to December 2023, presents a compelling case for value investing. The cumulative return of value stocks has eclipsed that of growth stocks by an astounding 3,000%. To put it into perspective, value investing has delivered 30 times the return of growth investing over this period.
This remarkable outperformance underscores the resilience and potential of value investing. It serves as a reminder that while market trends may fluctuate, the fundamentals of value investing remain a cornerstone for building wealth. As we navigate the complexities of today’s global markets, the lessons from the past century continue to guide our investment strategy at HCM.
We believe that this historical perspective reinforces our commitment to value investing. It highlights the importance of patience, discipline, and a focus on fundamentals in achieving long-term investment success. As always, we remain dedicated to helping our clients unlock global investment opportunities through a disciplined and informed approach to value investing.