False prophets are everywhere, these days. While I can’t root them all out (like weeds, more will pop up at the first rain), I must take issue with those self-proclaimed “sages” who are given to proclaiming: “Value is Dead!” Long story short: earnings data just does not support that claim.

Value investing is rooted in sound economic principles: growth firms typically increase their earnings faster than value companies, but investors tend to over-extrapolate that excess growth rate. Overinflated growth expectations then subside, and the prices of growth stocks catch up to their intrinsic worth, leading to value outperformance.