Can someone help me understand why growth stocks have less volatile earnings than Value stocks and why do growth stocks outperform during recessions v.s value? I find this strange only because whenever there is market uncertainty, most fund managers tilt their portfolios towards defense/value type stocks such as Utility stocks which the material deems as a value stock.
good post about this 2-3 days ago, don´t have the link, sorry
i agree with your thoughs PJ - i don’t agree with teh CFAI on this one but exam day i will reluctantly write that growth stocks have less volatile earnings than their cyclical value stock counterparts.
Growth stocks tend to outperform during a recession, because growth in a recession is valued and thus those stocks will be bid up b/c people want the growth hence a higher return.
even the other thread on growth volatility ended in an impasse… so just learn up the cfa answer
k…cool