Sandler: In late 2022, growth stocks traded below their historic 50-year premium
Ricky Sandler · Ricky Sandler - Evolution of Long-Short Equity Investing (EP.414) · Oct 28, 2024 · at 26:17
Ricky Sandler, founder and CIO of Eminence Capital, explains how the firm integrated quantitative historical market analysis to validate fundamental investment ideas during the 2022 growth stock sell-off.
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“So in late, twenty-twenty-two, as an example, we did a fifty-year analysis on the premium for growth. When analysts came to me in the middle of twenty-twenty-two and said, hey, this stock is cheap, it's back at pre-COVID multiples. I instinctively knew pre-COVID wasn't cheap multiples for growth, but by late twenty-twenty-two, as you were looking at everybody selling from profitable growth, it looked more interesting, and so what our fifty-year analysis showed was that growth was finally at a discount to its long-term premium to the average company.”
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