1/n Got the timing of resolution right, but not direction. Amazing to see a complete retrace in 14 months despite BOTH styles higher. Like I argued with Value back in May 2020, the problem has not been long Large Growth (up 10% in 4 mos), but shorting small (value or growth) 
https://twitter.com/profplum99/status/1322284059113017344
2/n So what now? Is this a replay of 2016 where Large Growth reasserts? Or do we continue the rotation? My bias continues to be that a sustained rally led by value is very hard. Index rebalance beckons. Many high flyers like GME and PLUG are moving out of small and into mid
3/n And valuations have largely normalized with the yield on small value at 0.82% vs 0.66% for large cap growth. P/E ratios similar, especially when quality adjusted.
4/n Many pointing to Energy as the new leader, identifying roundtrip in XLE and XLK over past 21 years. And this might be right... Imho important to note 50% of XLE is XOM + CVX. Megacap with no growth prospects beyond oil & gas price increases. Good div yields, but little else.
5/n The cure for high prices in commodities is high prices... and the setup today, with most commodity curves now in backwardation (indicating current, not future shortages) is very different than a year ago
6/6 And while passive flows continue to dominate, the inevitable chasing into value is well underway (similar spike Dec 2016)... meanwhile the Borg (Vanguard) just keeps assimilating at a steadily increasing pace... tortoise beats hare in my read
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