The death of value investing?

By Gaurav Sodhi

I was recently introduced to the musings of successful US hedge fund manager, John Burbank (thanks, Nathan) who runs Passport Capital.

Like a lot of hedge fund guys, he has some wacky ideas and some strong views. You can see a list of what's on his mind here.

There are a lot of ideas on that page, some of them useful, others mere rants. But two things in particular stood out.

Burbank says that the US is changing and because of that, 'bottom up value investing is dead'. This is a big statement. The article is scant on detail, but it sounds like he is a believer in the 'new normal', something Greg has raised in a previous Director's Cut and a phase first coined by Bill Gross of Pimco.

I would have thought that in a new normal world – that is, a world of below trend growth for an extended period – value investing and bottom up stock picking become more important, not less.

This article (Is value investing dead?) sums up the pro-value position nicely.

The other interesting item is his hint that he is buying big western blue chip companies. Burbank isn't the first or only prominent investor to point this out. It's worth thinking about.

Do you agree with Burbank? Has your investing style changed in light of the last few years?