Richard Pzena (Trades, Portfolio), a brilliant value investor tracked on GuruFocus, recently appeared on CNBC. He talked about a few different subjects and the channel cut the clips up. There are four of them in total. Interestingly, they cut up the tape to where Pzena discusses active versus passive investing in one clip, and in the other he discusses a market divide. They are both at the end of this article. I’m writing this article because what Pzena says in one clip ties into what he is talking about in the other clip. You need to piece things together to understand what environment value investing is in right now.
In the first clip, Pzena talks about how it makes no sense that active investing will continue to underperform passive investing. He says there is a very strong correlation between the value cycle and performance of active investing. When value works, active investing works. Continue Reading »