Value as an inflation bet.

Value as an Inflation Bet

 I really liked this post by Lawrence Hamtil on value as an inflation bet. He touches on an old William Bernstein post discussing the relationship between inflation and the value factor. It makes sense if you think about it – growth stocks become increasingly predictable when inflation is low because the variance in cash flows is reduced. This makes value stocks relatively less attractive. So value is a more stable strategy when inflation is high because growth cash flows become more variable.