Mr. Ruth: I'd add that we don't look down upon value investing. However, from a tax management perspective, we've chosen to be focused on growth despite the fact that the world has turned. The late 1990s were terrible for value investors, and certainly the last year and a half has been difficult for growth investors. But when you measure both styles over a 10-year time frame or a 15-year time frame, your pretax returns are very close to each other after going through the full investment cycle. We're certainly not anti-value. It's just that from a tax management perspective, we find the growth discipline produces superior aftertax returns over a long time horizon and is much easier to implement.
TWST: What has the performance been over the past year, and what is the
outlook going forward?
Mr. Pollock: Chris and I spend a lot of time trying to identify what
might be catalysts for a particular stock or industry moving forward.
And that, obviously, is an ongoing challenge. As for the market or
growth stocks outperforming going forward, we are hard-pressed to see
any particular catalyst. Individual stocks will certainly identify and
distinguish themselves, but as far as a blanket statement that growth
stocks or stocks in general will outperform, we're not in the camp that
is pounding the table at this particular point in time.
Tickers included in this excerpt: APOL, COF, CSCO, EXPD, GD, MSFT, QCOM, UOPX
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