Thread by @profplum99

@jam_croissant @mre2all 1/n Thanks for this. While I actually agree with some of the fundamentals here, I'm a bit skeptical of the mechanics. Companies like AMZN, AAPL, MSFT, etc have remarkably strong cash flows and have not had to tap capital markets except to subsidize employee compensation

@jam_croissant @mre2all 2/n While we can argue Fed support helped these corps, it seems more likely that the Fed has net hurt these corporations by keeping funding flowing to their weaker competitors. In fact, highly rated corp debt growth has been restrained while lower quality debt has grown rapidly

@jam_croissant @mre2all 3/n I'd go further and note that the holders of "value" stocks continue to be active managers. @choffstein recent piece does a good job of illustrating this. Unless you can create a mechanism for passive funds to flow into actively managed vehicles, I don't see how this reverses

@jam_croissant @mre2all @choffstein 4/n In prep for a podcast with @PrestonPysh last night, I listened to a recent episode where his partner in crime @stig_brodersen was suggesting $LBTYA as a beaten down value stock. Could care less about fundamentals... look at the holders... 4 of top 5 are losing assets.

@jam_croissant @mre2all @choffstein @PrestonPysh @stig_brodersen 5/5 And this is my core critique. Sure the fundamentals can improve; and yes, active managers may try to step in and buy these names. But perversely, this just creates the bounce rather than the recovery... because nothing is saving these asset managers. Weak holders one and all