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Mythology and Fundamentalism in the Investment World

Global Equities

BNP Paribas Asset Management

Key Takeaway

“Reversion to the mean” is viewed by many as a natural law. But the story of humanity is one of long-term progress – evolution. This will be reflected clearly in the select few companies that help drive this process. Here at C WorldWide, we believe that the distinction between value and growth is imprecise and will become more and more irrelevant in the coming years. Some talk about “Value v Growth” as though it were a boxing match between two wildly different opponents. It’s not. In reality, a good investment is about finding both value and growth. At least, it is for us at C WorldWide. We think it better to spend less time on these theoretical discussions and focus instead on identifying the small cohort of companies that are capable of growing profitably over time – what we like to call compounders.

One of the wryest but most telling quotes we’ve run across comes from Wall Street legend and value investor James Grant: “A bubble is a bull market in which the user of the derogatory term has failed to participate” Listening to many market commentators on the seemingly crazy pricing of stocks and markets, it’s worth keeping Grant’s words in mind when assessing the validity of these claims. The message could well be coming from a place of emotion rather than a place of reason.

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