The Contrarian Investor: Where's the value?

Where’s the value?

What is a good old-fashioned value investor to do in our topsy turvy markets?

Optimistic value types might want to start by examining a recent paper from Morgan Stanley equity analysts Matthew Garman and Graham Secker. Garman and co argue current conditions favour value stocks, with “improving macro growth, an inflection in European earnings and the likelihood of rising bond yields all likely to support value”. Yet the MS analysts also concede value stocks are becoming hard to find: “The breadth of stocks that look expensive against their own history is at the highest level in our data, with 81% of stocks now in the top third of their eight-year P/E range.” ...