The great rotation to value has commenced in the stock market. And it's likely the thing that's needed if this bull market is going to continue.
A parallel rotation to value is also occurring politically. And it's likely the thing that's needed if this Republic is going to continue.
“Within the broader stock market there was a large rotation, out of growth and into cheap, or ‘value,’ shares,” writes FT.com. “Expensive shares had their worst performance against cheap ones since 2009. The other ‘factor’ popularised by academics Eugene Fama and Kenneth French – momentum – also had a terrible time. Momentum refers to the tendency of rising shares to keep going up – but they did not live up to the name. The reversal has been so large that now the highest-momentum stocks in Europe are cheaper (based on price to book value) than low-momentum stocks, according to Alla Harmsworth at Nomura, for only the third time in 25 years.”
It’s kind of like that in politics too.
After a weekend of unprecedented violence in Chicago-- you know, a city where the politicians of told us crime is going down-- current mayor and former Obama Chief of Staff, Rahm Emanuel, has shifted from momentum himself into “values” mode.
"Every child deserves a childhood, regardless of where they live,” said Emanuel during a press conference this week according to the Chicago Tribune. “But to do that, our city and community, the neighborhoods that make up this city, cannot live by a code of silence. They have to live by a moral code…. It's whether you have values."