Source: Business Insider
The valuation gap between value and low-volatility stocks has grown twice as large as it was during the height of the dot-com boom. This trend has created an unsustainable “equity factor bubble” that is likely to burst, according to Marko Kolanovic, JPMorgan’s global head of macro, quantitative, and derivatives strategy. He explained why the bubble is inflating, how it will likely burst, and what investors should do to position accordingly. Click here for more BI Prime stories . It is still a tough time to be an investor whose preoccupation is finding cheap stocks. Value investors, as they’re called, caught a break last year when their factor returned to favor amid an underperformance streak that had largely been in place since 2007. The sudden rotation led quantitative-investing heavyweights to call for a prolonged value comeback. They included Marko Kolanovic , JPMorgan’s global head of macro, quantitative, and derivatives strategy, who expected that the shift to value would persist into Q1 2020.