Two weeks back, we trimmed growth and rotated into value—the spread had become absurd. Since then, the cap-weighted index broke its 50-day MA while equal-weight has actually strengthened.
This is what mean reversion looks like. When valuation gaps get extreme, they close. Not through headlines or narratives, but through price. Growth got expensive relative to earnings power. Value hadn't moved. We repositioned.
Now the market's doing the work. Cap-weighted indices—dominated by a handful of mega-caps—are rolling over. Equal-weight, which spreads exposure across fundamentals rather than momentum, is holding up.
This isn't genius. It's just paying attention to valuation spreads and acting when they stretch too far. Markets don't care about your story. They care about price relative to value. And when those two separate enough, gravity wins.
This is what mean reversion looks like. When valuation gaps get extreme, they close. Not through headlines or narratives, but through price. Growth got expensive relative to earnings power. Value hadn't moved. We repositioned.
Now the market's doing the work. Cap-weighted indices—dominated by a handful of mega-caps—are rolling over. Equal-weight, which spreads exposure across fundamentals rather than momentum, is holding up.
This isn't genius. It's just paying attention to valuation spreads and acting when they stretch too far. Markets don't care about your story. They care about price relative to value. And when those two separate enough, gravity wins.