March 31, 2022 Quarterly Letter


These days, the investment highway seems more treacherous than an L.A. freeway in a rainstorm. Defensive techniques aren’t just for driving. Value has become defensive again, just as it was in the aftermath of the late 1990s Tech Bubble.

March 31, 2022 Quarterly Letter2022-05-23T15:36:38+00:00

December 31, 2021 Quarterly Letter


Poplar Forest’s portfolios are currently valued at one of the largest price-to-earnings discounts to the S&P 500 since we’ve been in business. In effect, the market is suggesting that the outlook for our companies is less attractive than it has ever been. We disagree. Our companies may be underdogs, but when we look out over the next 3-5 years, we believe that their fundamentals will more than beat the spread.

December 31, 2021 Quarterly Letter2022-01-07T22:26:14+00:00

September 30, 2021 Quarterly Letter


With the economy getting back to normal more quickly than expected, the U.S. Federal Reserve will soon start the multi-year process of normalizing monetary policy. In the face of potentially rising interest rates, investor worries are growing: stocks look expensive, bond prices go down when yields rise, and cash earns nothing. But, there is a fourth option: value stocks.

September 30, 2021 Quarterly Letter2021-10-04T17:03:47+00:00

June 30, 2021 Quarterly Letter


With growth stocks having reasserted themselves as interest rates trended lower during the second quarter, some naysayers are already predicting the end of this value cycle. I couldn’t disagree more. For one, I continue to believe that bond yields have separated from reality due to price manipulation on behalf of central banks at home and abroad.

June 30, 2021 Quarterly Letter2021-07-28T21:25:57+00:00

March 31, 2021 Quarterly Letter


During these wild market swings, we’ve seen a marked change in the type of companies that investors favor. Former growth darlings are being sold to free up funds to purchase shares of economically-sensitive businesses. Investors want beneficiaries of economic reopening and reflation driven by vaccine deployment and continued fiscal and monetary stimulus. As a result, value stocks have begun to materially outperform growth stocks.

March 31, 2021 Quarterly Letter2021-05-24T22:59:07+00:00

December 31, 2020 Quarterly Letter


The most important job for our investment team is to identify situations where embedded expectations are unreasonably low while avoiding stocks that are cheap for good reason (aka value traps). Cheap stocks can stay cheap unless fundamentals turn out to be better than expected. In contrast, the “great” company that merely ends up being “good” often generates disappointing results for its shareholders - just like so many New Year’s Eves.

December 31, 2020 Quarterly Letter2021-05-24T23:04:12+00:00
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