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Stop what you're doing... Before you do anything else, search "value investing" on the Internet.

It's Not Value or Growth... It's Both By Marc Gerstein, director of research, Chaikin Analytics Stop what you're doing... Before you do anything else, search "value investing" on the Internet. Then, go to almost any financial website that pops up. I bet they all include a sentence like... Value investors buy stocks priced below what they're really worth. Now, this idea might sound simple. But some supposedly smart people just don't get it. The problem boils down to what these so-called "experts" do wrong from the jump... They mistakenly look for just attractive prices. By that, I mean low valuation ratios. And they completely miss the second half of the sentence ("what they're really worth"). You see, many of these experts will tell you that investing is an endless battle of value versus growth. They believe it can only be one or the other. But that's completely wrong. I'll explain what I mean in today's essay. And as you'll see, the Power Gauge once again acts as our guiding light. It helps us see that it's not value or growth – it's both... Recommended Links: The ONLY stock you need for 2023 Greg Diamond is giving away the name of his No. 1 stock for 2023. You could've already doubled your money five different times with this stock using his strategy, which dates back to 1876. It's how Greg managed up to $900 million a day on Wall Street, where he booked an average profit of $155,000 per day. Click here to learn the ticker. U.S. Stock Market "Inflection Point" Is Underway In recent weeks, there's been a growing number of warning signs of the next massive shift in the stock market. If you're over age 50, and your retirement plans depend on your portfolio recovering in the next few years, you must see how this could affect your money. We've discussed the recent struggles of growth stocks in these pages before... Cathie Wood's "disruptive innovation" exchange-traded funds ("ETFs") are prime examples. Her flagship Ark Innovation Fund (ARKK) is down nearly 80% from its February 2021 peak. This recent downtrend is also evident with less flashy, style-based ETFs. For example, the Vanguard Growth Fund (VUG) has fallen about 33% since late 2021. Meanwhile, despite the rough bear market, value stocks are holding up relatively well. The Vanguard Value Fund (VTV) is only down around 2% over the same span. However, when we zoom out, the story is much different... From early 2017 to early 2022, the value-focused ETF rose 57%. Meanwhile, the growth-focused ETF climbed 185%. And ARKK ran way ahead, soaring 354% over that period. So as investors, we need to figure out which period tells the true story – or if it's something else. And the harder question is, "How will the value-growth rivalry play out going forward?" My simple answer is... value stocks have real merit. Higher interest rates make investors less willing to "discount" profits too far into the future. So it's easier to disappoint the typically grander expectations of growth-only investors. But let's take it further... Our Power Gauge system includes four valuation ratios among its 20 different factors. And 16 factors relate in some way to a company's expected future growth and business risk. I recently explored the interaction between value stocks and the Power Gauge... More specifically, I studied two sets of strategies over a series of 13-week holding periods. This analysis included 41 test "portfolios" going back a full year to January 7, 2022. The first group was simply stocks with "bullish" or better overall rankings from the Power Gauge. The second group included the stocks within the first group that also had "bullish" or better rankings for price-to-sales (P/S) and projected price-to-earnings (P/E) ratios. Here are the average returns (including dividends) of the various portfolios within these two strategies. They're expressed in annualized terms... As you can see, combining the Power Gauge with my two favorite valuation factors added almost 1.1 percentage points to an already market-beating performance. And it narrowed the list of qualifying stocks from 445 to 95. Of course, you'll also notice that all the returns are negative. And none of us are aiming for negative returns. After all, our goal is to make money – not lose it. But that's exactly why my point is so important today... We can use the Power Gauge to our advantage as value begins to outperform growth. Growth stocks led the charge for the past decade. But history shows that's an anomaly. Going back to 1927, value has beaten growth by an average of 4% annually. And it's not just statistics. Value meshes with human nature as well... It's normal for investors to buy stocks at reasonable prices relative to what they're really worth. People who ignore that part of the puzzle – like many folks over the past decade – act like car buyers who are paying Lamborghini prices for a Mercedes (or even a Chevy). If fancy cars are your thing, it's fine to pay a Mercedes price for a Mercedes. But you never want to pay a Lamborghini price for the same car. In the end, the Power Gauge is our guiding light. It can help us find the proper balance between the right price to pay for a stock and what the company behind it is really worth. And when you look at it that way, it's not value or growth... it's both. Good investing, Marc Gerstein Market View Major Indexes and Notable Sectors     # Hld:     Bullish     Neutral     Bearish Dow 30 -0.29% 11 18 1 S&P 500 -0.04% 124 290 85 Nasdaq +0.65% 30 52 18 Small Caps +0.19% 503 964 426 Bonds +0.53% Information Technology +1.16% 21 44 11 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes are mixed. *  *  *  * Top Movers Gainers TSLA +5.94% NCLH +5.68% NVDA +5.18% AMD +5.13% CRM +4.69% Losers BAX -7.74% REGN -7.69% NOC -4.99% DXCM -4.97% PFE -4.97% *  *  *  * Earnings Report Reporting Today Rating Before Open After Close SNX ACI No earnings reporting today. Earnings Surprises LTH Life Time Group Holdings, Inc. Q4 $-0.06 Beat by $0.02 CMC Commercial Metals Company Q1 $2.24 Beat by $0.28 WDFC WD-40 Company Q1 $1.08 Missed by $-0.14 *  *  *  * Sector Tracker Sector movement over the last 5 days Communication +5.19% Materials +4.12% Financial +3.10% Discretionary +2.87% Real Estate +2.49% Industrials +2.29% Information Technology +1.40% Utilities +1.39% Staples +0.66% Energy -0.25% Health Care -1.80% *  *  *  * Industry Focus Retail Services 26 45 23 Over the past 6 months, the Retail subsector (XRT) has outperformed the S&P 500 by +4.26%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #13 of 21 subsectors and has moved down 2 slots over the past week. Top Stocks GPI Group 1 Automotive, ORLY O'Reilly Automotive, SIG Signet Jewelers Limi *  *  *  * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here. You're receiving this e-mail at diansastroxz.forex@blogger.com. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. www.chaikinanalytics.com. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors. Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.