I was fortunate to work with Chris Meredith, OSAM’s C0-CIO, on some of the historical research for his fascinating new paper released this week. The piece covers another period, from 1926-1941, in which Value similarly underperformed Growth during a Technological Revolution.
“These are long cycles that have played out before, starting with the Industrial Revolution in the 1770s. What we have offered here, as our ability to gather historical data continues to improve, is the possibility that long regimes where Growth outperforms Value are part of these arcs… eventually as the innovations move to maturity, Value investing has also returned towards a longer-term trend of outperforming.”
“The full power of the Heinz ‘system’ and of the man’s innovations can best be understood by considering each aspect of HJ and the business. In almost all these regards, HJ Heinz was years ahead of other food manufacturers, and often ahead of the manufacturers in any industry.”
“Many Americans viewed banking as a form of usury, while others leveraged the power of credit to seek their fortune in the American West. Antebellum finance was centered around the expansion of railroads, which led to the construction of 24,476 miles of rail by July 1, 1857. Thousands of Americans moved West in search of their fortune in the 1850s, an experience that coincided with speculation in land and railroad securities.”
“This paper examines major privately-owned British railway companies before World War I. Quantitative evidence is presented on return on capital employed, total factor productivity growth, cost inefficiency, and speed of passenger services… Cost inefficiency rose before 1900 but then was brought under control as a profits collapse loomed. Without the discipline of either strong competition or effective regulation, managerial failure was common.”
“She was born to slaves—her father valued at $700 and her mother at $600 on their owners’ books… her parents, and five siblings shared a one-room sharecropper’s cabin. Soon she was an orphan and a single mother. But she did not let this humble beginning hold her back. Madam Walker was one of the most remarkable self-made women—or person of any gender—in American history. This is her story.”
