Gerard O’Reilly on the Future of Value Investing
The decade-long onslaught inflicted by growth stocks on value investors is due to end, according to Gerard O’Reilly. But the data is too “noisy” for him to say when that will happen.
O’Reilly is the CIO and co-CEO of Dimensional Fund Advisors. Dimensional is the leader in factor-based or “structured” investing. It is a 40-year-old firm with 1,400 employees and 13 offices globally. It has $600 billion under management, most of which is in equities with 20% in bonds.
He was interviewed via webinar on January 21 by Alex Shahidi and Damien Bisserier, who are the managing partners and co-chief investment officers at Evoke Advisors and ARIS Consulting, a Los Angeles-based asset manager, as part of its master speaker series.
I’ll discuss O’Reilly’s predictions for value investors, but first let’s review his background and what he said about Dimensional’s strategy and positioning.
An Irish rocket scientist
O’Reilly has a PhD from Cal Tech in aeronautical science, making him a bona fide “rocket scientist.” He said that education refined his analytical skills and taught him to make cogent arguments in response to his peers. With a PhD, the goal is to find and create something new, which he said translates to Dimensional’s mission of academically vetted methodologies.