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In our July 7, 2022 podcast with Tobias Carlisle, the Founder of The Acquirer’s Multiple, we got a really great perspective on this subject matter that fits nicely in the narrative of large cap overvaluation vs. opportunity in smaller stocks poised for growth on the basis of their underlying fundamentals.
He visited a phrase coined the “Nifty Fifty” that in two instances, decades ago, was applied to a group of stocks that were very relevant to investors who were looking to capitalize on what turned out to be disruptive, or popular high growth stocks, like $MS, $GE and $WMT. Tobias recounted how history kind of repeated itself on these two occasions – during a boom in the 1960s to 70s, and in the wildly notorious dot com era, however it was not just relegated to those time periods.
He pointed to other historical patterns when investors successfully sought only high growth stocks, but while that was the ebb, the antithesis was the subsequent flow of value that crept into the equation – the so-called mitigator, the antidote – to keep things in check for a while after growth stocks or markets corrected.