Morgan Stanley: It’s A Bad Time To Be A Contrarian

It's a well-known fact that value investing tends to underperform in bull markets. As Seth Klarman wrote at the height of the dot-com bubble:

“ ... I must remind you that value investing is not designed to outperform in a bull market. In a bull market, anyone...can do well, often better than value investors. It is only in a bear market that the value investing discipline becomes especially important...it helps you find your bearings when reassuring landmarks are no longer visible …” -- Source 

[klarman]

Unfortunately, year to date, value strategies in European equity markets have underperformed strongly, and over the past twelve months growth strategies have been the outperformers.

Research from Morgan Stanley released this week highlights the vast gap between the performance...