Chris Grisanti, chief market strategist at MAI Capital Management, argues that value investors can successfully invest in technology companies, citing his significant gains from Dell Technologies, which rose over 350% this year. Grisanti's approach contrasts with traditional value investors who focus solely on present cash flows and avoid tech stocks due to their reliance on future earnings.
His MAI Focused Equity Portfolio, which includes both tech giants like Microsoft and Amazon and traditional value stocks like General Motors, has outperformed the market by about 8 percentage points this year.
The market's concentration in a few mega-cap firms, particularly in the AI sector, has made it difficult for traditional value managers to keep pace, as evidenced by the Russell 1000 Value index's underperformance compared to growth stocks.
Recent changes in management and investment strategies at established funds like Vanguard Dividend Growth and JPMorgan Equity Income indicate a shift away from strict value investing principles, raising concerns about the sustainability of these strategies in a market increasingly dominated by AI.
Despite these challenges, Grisanti notes that AI has created opportunities for both value and growth investors, suggesting a potential shift in the investment landscape