John Rogers Says Market Valuations Are Reminiscent of the 1970s

Ariel Investments leader sees a lot of bargains in the small and mid-cap space

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Dec 16, 2020
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John Rogers (Trades, Portfolio) appeared on CNBC'S "Halftime Report" on Tuesday to discuss market valuations and his views on recent market action amid the ongoing Covid-19 pandemic.

The co-CEO and chief investment officer of the Chicago-based firm feels that currently "it's a tale of two markets."

"I think in the small and mid-cap value space there is still an enormous amount of bargains; a lot of companies selling for 30%, 40% discounts to what we think those businesses are worth," he said. "But then the S&P is dominated by the FAANG stocks and they, I think, are extraordinarily expensive."

Rogers noted the amount of optimism regarding these stocks along with the large amounts of money being poured into indexing reminds him of the 1970s.

"So for us, this feels like the '70s when you had the Nifty Fifty and, of course, that ended badly for those growth stocks and helped out the value stocks," he said. "So that's where we are. We think buy value, buy smaller companies. That's where the opportunities are. And avoid those large-cap growth names that have gotten to be so expensive."

Watch the full segment below.

Disclosure: No positions.

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