macrocephalopod

A fundamental problem with "value investing" -- every valuation metric implies a growth rate (the rate that would give all stocks the same expected return). Buying a "cheap" rather than "expensive" stock is just a bet that the expensive stock won't grow into its valuation,

or more accurately that the cheap stock will beat its implied growth by more than the expensive stock. When you look at it this way it's clear that "value investing" is far from guaranteed to outperform. It's not even obvious there should be any premium at all.