Growth stock has been underperformed “consistently” ever since the indices (Russell 1000 Growth and Value) were launched back in 1970s. Several reasons for the continuous underperformance, 1.The construction of index itself is disadvantaging growth as it places heavy emphasis on PB ratio. The simple rationale behind is that stocks with high PB are classified to growth and stocks with low PB belong to value. We all learn that low PB stocks are the undervalue one and is “cheap” 2. High forecast growth stocks also contribute to the unfair situation where they are more vulnerable to mean reversion. However, after going through several decades, been through junk bond era, S&L crisis, tech bubble and the maturity of valuation framework. The valuation spreads is compressing which effectively make the cheap stock not so cheap anymore. So is it time for growth stock to outperform value? Maybe not yet but at least the portfolio should have skew towards growth more than ever. What’s your thought on this?