Want to expand a bit on this thought, and try to synthesize some thoughts going through my head.
Prior to covid, I had a conversation with one of my smartest investor friends at a huge long only shop. He said if you look at eg Nike or Starbucks, absolute multiples are high, and it wasn’t just because of low rates. It was a scarcity premium to certainty of terminal value.
In plain terms, so many companies are currently facing existential risks to their terminal value, that long only’s running tens and hundreds of billions of dollars are crowded into businesses where there is certainty they’ll be there in ten years.
I can hear some of you saying same as it ever was, but it resonated with me given the massive bifurcation not just between growth and ex growth, but between quality and everything else, even if that quality grows at low to mid single digits.
Then covid strikes. So now not only is there uncertainty around terminal value on the back end, covid introduced heretofore never contemplated risks about the ability to survive the near term because revenue was in some case entirely gone, in other cases only down 30-60%.
When you see valuation spreads hit 4-5 standard deviations, it's not a statement of absolute valuations, it's about internal valuation disparities. It means the market is dramatically pricing in “something”. In the late 90s it was the new economy. In the GFC it was a depression.
Today, spreads are at all time wides because of short term existential survival risk coupled with long term terminal value risk. Value has lagged most of this cycle, because the market has been right, and valuation disparities rarely made up for fundamental underperformance.
Twice since the GFC you have (briefly) gotten paid for making a value bet, 2011 and 2016. Today's starting point is far more statistically attractive, on par with the GFC and Great Depression. 
That does not ensure value outperforms, it is often more levered, as indeed it is today, and total economic shutdown makes leverage far more dangerous than ever before. But everyone can see that, and it is among the multiple reasons prices and thus spreads are where they are.
I am not a quant, I am not a technician, I’m just trying to understand the conditions on the playing field. It's always different this time because the proximate cause of opportunity is ever changing, but the game is the game.
