Dimensional’s Co-CEO: “If you stop believing in value, you stop believing in lots of what makes the world go ’round.”
In a recent webcast, Dimensional Co-CEO and Chief Investment Officer Gerard O’Reilly spoke on the performance of value stocks relative to growth stocks, addressing the theory and data supporting a value premium.
Growth stock: A stock trading at a high price relative to a measure of fundamental value such as book equity.
Premium: Return difference between two groups of stocks.
Value stock:A stock trading at a low price relative to a measure of fundamental value such as book equity.