Poplar Forest Analyst Insights: Energy Q&A
In this edition of Analyst Insights, Akash Ghiya explains the pillars of our investment thesis in the Energy sector, reviews the sector’s 10-year history, and discusses the key issues on investors’ minds in 2019.
September 30, 2019 Quarterly Letter
As Mike Tyson famously observed: “Everybody has a plan until they get punched in the mouth.” For the last few years, Value investing has felt like being in the ring with the former champ. Successful long-term investors know they will have to take a few punches along the way because there is simply no way to get every stock pick right. The issue is not about getting punched: it’s about how one responds to the blow.
A Rare Opportunity for Value Investing
We believe the market has set up a rare opportunity for value investing. The valuation gap between growth and value stocks is at historically high levels, similar to that last observed during the dot-com bubble of 1999-2000. For investors who've benefited from the strong rally in growth stocks, history suggests it may be prudent to reallocate profits toward value stocks, where valuations are much more reasonable and future returns are potentially more favorable.