Imagine two racing cars. One is called Growth. The other is called Value. They have been racing each other around the same giant track for more than 100 years. Sometimes, Growth records faster lap times. Other days, Value circles the track far faster than Growth. But Value is usually the faster car. That’s why it adds to its lead roughly 8 out of every 10 decades. As a result, it’s thousands of miles ahead.
But when Growth runs well, people often bet in droves. They say, “This time it’s different. Growth will now always win.” But when almost everyone believes in a turning of the guard, Value kicks into gear to increase its long-term lead.