Until 2020 I picked stocks the Buffett way and nothing else. That year governments created trillions of dollars in a few months, it scared me, and I started studying cycles. It was also the year the gap cheap stocks stopped losing.
Inside this newsletter is a ledger of six moments since 1999 when someone declared value investing dead, or asked if it was. It shows what cheap stocks did against expensive ones over the next 3 and 5 years. Below the line, I run the same test two more ways and look at where the gap stands today.
Six headlines, and what each one actually said
Here’s the list:
Barron's ran a cover story on December 27, 1999 asking what was wrong with Warren Buffett.
Julian Robertson shut his Tiger hedge fund on March 30, 2000, telling his investors the market had stopped rewarding the way he picked stocks.
On June 8, 2017 Hedge Fund Alpha ran the headline "Goldman Sachs: Value Investing Is Dead."
CNBC asked on June 21, 2019 whether it was.
Institutional Investor ran "Why Value Investing Sucks" on November 13, 2019.
And on January 31, 2021 an AQR paper in the Journal of Portfolio Management asked "Is (Systematic) Value Investing Dead?" and called the idea premature.
To keep "cheap" and "expensive" honest, I used the free portfolios in Ken French's data library (data through August 2026). Each June they rank US stocks by book value against price. The cheapest 30% is my cheap group and the most expensive 30% is my expensive group, each weighted by company size. Put $1 into each in July 1926 and leave it, and you have two piles. When the cheap pile grows faster than the expensive pile, cheap is winning.
The table shows how far cheap had already fallen behind when each headline ran. It then shows what the cheap pile did against the expensive pile over the next 3 and 5 years. A figure of +90% means the cheap pile ended up 90% bigger relative to the expensive pile. A figure of −44% means 44% smaller.
| Cheap vs expensive US stocks around six “value is dead” moments: how far behind cheap already was, and what came next | |||
| Moment | Gap already open | After 3 years | After 5 years |
|---|---|---|---|
| Dec 27, 1999Barron’s ↗ · cover story, “What’s Wrong, Warren?” | −31% | +90% | +122% |
| Mar 30, 2000Tiger closing letter ↗ · hedge fund shuts | −30% | +73% | +126% |
| Jun 8, 2017Hedge Fund Alpha ↗ · “Goldman Sachs: Value Investing Is Dead” | −34% | −44% | −20% |
| Jun 21, 2019CNBC ↗ · asks whether it is dead | −46% | −2% | −20% |
| Nov 13, 2019Institutional Investor ↗ · “Why Value Investing Sucks” | −47% | +9% | −11% |
| Jan 31, 2021AQR, Journal of Portfolio Management ↗ · paper, “Is (Systematic) Value Investing Dead?” | −61% | +18% | +28% |
What to notice: Cheap was already 30% to 61% behind when each headline ran, and the next 3 years ranged from 90% ahead of expensive to 44% behind.Source: My calculation from Kenneth French Data Library (link), Portfolios Formed on Book-to-Market (cheapest 30% vs most expensive 30%, value-weighted, monthly; CRSP 202608 build), July 1926 to August 2026 · data through August 2026. Measured from the end of the month of each headline. Gap already open = fall in the cheap-over-expensive ratio from its previous high. +90% = the cheap pile ended 90% bigger relative to the expensive pile. | |||
The headline comes after the damage
In all six, cheap was already far behind. When Barron's ran its cover, the cheap pile had fallen 31% against the expensive pile from its May 1998 high. By January 2021 it was 61% below its February 2007 high. A style has to lose for a while before investors pull money, before a fund closes or a bank writes a note, before an editor commissions the piece. So by the time anyone says "dead," the losing is already in the numbers. The headline tells you how long cheap has been behind. It doesn't tell you how much longer.
What came next wasn't one thing. Three years after the Barron's cover, cheap stocks were 90% ahead, one of the best 3-year stretches in the whole record. Three years after the Goldman headline they were 44% behind, one of the worst. The rest sit in between.
Look at what each pile did, not only the ratio. Three years after Tiger closes, cheap stocks were down 8%. Expensive stocks were down 47%. Cheap came out ahead by losing less, so I don't read the first two as value coming back. It was the expensive end falling. After June 2017 it went the other way, with cheap down 9% and expensive up 63%.
| What each pile did in the 3 years after the headline | ||
| Moment | Cheap stocks | Expensive stocks |
|---|---|---|
| Dec 1999 · Barron’s | +8.1% | −43.0% |
| Mar 2000 · Tiger closes | −8.4% | −47.2% |
| Jun 2017 · “Value Investing Is Dead” | −9.5% | +62.7% |
| Jun 2019 · CNBC | +38.6% | +41.5% |
| Nov 2019 · Institutional Investor | +52.1% | +40.1% |
| Jan 2021 · AQR paper | +53.5% | +29.9% |
What to notice: In the first two rows the expensive end did the falling, −43.0% and −47.2%. Cheap stocks came out ahead by losing less, not by rising.Source: My calculation from Kenneth French Data Library (link), Portfolios Formed on Book-to-Market (cheapest 30% and most expensive 30%, value-weighted, monthly; CRSP 202608 build) · data through August 2026. Total return over 36 months from the end of the month of each headline. | ||
How this sits with my style of value-investing
IBelow the line, I run the same six dates with cheap defined by earnings and by cash flow, which shrinks the comeback since 2020 a lot.
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