Ben Inker: better times ahead for value investors

The years of pain for value investors could soon be at an end, GMO's Ben Inker said in a recent newsletter.

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Ben Inker, head of asset allocation, GMO
(Image credit: 2011 - The Boston Globe)

The yearsfrom 1997 to 2000 were "unimaginably bad" for value investors such as GMO, says Ben Inker in a recent letter to investors. Not only did value stocks underperform drastically and emerging markets suffer a crisis, but not holding the hottest tech stocks could be hugely costly: leaving America Online (now AOL) out of GMO's US equity portfolio in 1999 by itself lowered returns for that year by more than one percentage point. But the "extreme pain" of that time which sent many clients running for the exits went on to create "the greatest opportunity set for valuation-driven investors since the Great Depression".

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