Daniel Loeb: 'We have already seen the revenge of the value nerds...more to come'

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By Daniel Shvartsman

AiVIF.com -- Famed investor Daniel Loeb, Chief Investment Officer and CEO at Third Point LLC, called for more of the same in 2023 after a 2022 that saw a sea change in investment narratives, as growth stocks dived and value returned to favor.

In a pair of tweets on December 26th, Loeb wrote that, "I tend to be more of a bottoms up analyst but 2023 should prove to be a year of a battle of two narratives. Rates and inflation on one hand versus GDP growth, margins and ultimately earnings on the other. Markets will be further determined by participant's outlook from current company performance versus '24 and beyond. I don't think camping out in the last decade's darlings, with rosaries in hand, hoping for a comeback, will be the winning strategy. We have already seen the revenge of the value nerds. I think more to come."

He went on a day later to add the caveat, "This was a framework to think about the market and economy not a prediction. That's up to you."

This comes a couple weeks after Loeb raised questions about Ark Invest's Cathie Wood and her firm's memo, calling it a potential "treatise to study the mindset of stonk hodlers."

Loeb's performance via Third Point lagged the market through Q3, though Q3 saw Third Point beat the S&P 500, as the firm added or added to positions in stocks like Colgate-Palmolive (NYSE:CL) and Danaher Corporation (NYSE:DHR). In the Q3 letter, Loeb wrote he was "sympathetic to many of these economic and geopolitical concerns, it is seeing very attractive valuations, particularly assuming an economic scenario short of financial Armageddon."

The doubling down on value investing is notable given Loeb was one of the more flexible value investing legends during the 2020-2021 boom, putting laser eyes on his Twitter profile (a sign of crypto kinship on Twitter), tweeting diamond hands emojis and talking up Miami, a notable crypto boom town. He also built up positions in the energy sector in late 2021, a well-timed entry given the subsequent rise in the price of oil.

Read also: Daniel Loeb's Stock Porfolio based on 13F filings