Valuation of value stocks (the cheapest ones) are near historic levels against the most expensive stocks on several measures – suggesting now might be a good time to invest in this factor.
This chart shows the price to book ratio of the expensive 30% of stocks divided by this ratio for the cheapest 30%, adjusted for industry.
The spread is now in 97th %ile of the ex-tech bubble range.
“China is certain to experience slower economic growth in the years ahead, but the bigger surprise may be that, in US dollar terms, this narrative could be a factoid because of a fault-line that leads to a precipitous fall in the Yuan.“
Great table from GS Research showing the main causes of US Recessions since World War I.
“A review of the last century of US recessions highlights five major causes: industrial shocks and inventory imbalances; oil shocks; inflationary overheating that leads to aggressive rate hikes; financial imbalances and asset price crashes; and fiscal tightening.”
