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Trends Watch: Global Value Investing

Published
Jan 30, 2025
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EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.   

This week, Elana talks with Paul Gray, Managing Partner, Ironhold Capital and Member of Board of Directors, Hedge Fund Association.  

What is your outlook for global value investing?  

Global value investing is going to be driven by the identification of cheap markets. The money will be made where the multiples are the cheapest. For instance, China is going through a really rough patch, and all public equities, regardless of quality, have been hit badly. Big names in the tech sector are trading for very cheap multiples, making it the most attractive market from a valuation perspective. In contrast, the U.S. and India are extremely overvalued markets, especially India in the mid- and small-cap sector. U.S. large caps are also heavily overvalued and due for a major correction eventually, particularly the Magnificent Seven. My outlook on global investing for Ironhold Capital is all about identifying the cheap markets and the best companies within those markets. 

Where do you see the greatest opportunities and why?  

China, in our view, has been hit the hardest of all the major global markets and economies. This represents the greatest upside for investors, provided they can identify high-quality businesses run by ethical management teams within China. There have been some issues with auditors and the quality of reporting not being up to global standards, but if investors can carefully analyze the financials and stick with ethical management teams, certain sectors could have significant upside. In particular, solar companies in China seem promising. Photovoltaic cell prices have been hit badly, and most solar companies appear to be at the bottom of their cycle. The inevitable recovery could mean that multiples will get re-rated, leading to an improvement as we move out of the bottom of the cycle toward a more median level in terms of earnings. 

What are the greatest challenges you face and why?  

The greatest challenge for us right now is finding high-quality businesses that are also undervalued. Both India and the U.S., which are two big markets for us, are extremely overvalued. As previously mentioned, large caps in the U.S. and mid- and small-cap companies in India are insanely overvalued. This represents a challenge for us, but we stay disciplined and continue looking for great opportunities in these markets. It’s especially difficult since the market is unfairly rewarding mediocre businesses with very high valuations. Psychologically, it’s very challenging to avoid participating in a frenzied rally that is driven by sentiment rather than fundamentals. That’s why this is the most difficult challenge we face right now. 

What keeps you up at night?  

While we don't have anything that keeps us up at night per se, we do believe the budget deficit in the U.S. could lead to rampant inflation down the line as the Fed tries to manage debt payments. There could also be a significant period of low consumption, especially since the deficit has really taken off in a major way. Although the U.S. has incredible assets—such as its dominant businesses that export globally, major oil and gas reserves, strong agricultural produce, and mineral-rich land—debt remains a huge burden for the country. It would be unrealistic for us to expect more than 3.5% GDP growth long-term, and as such, growing out of this deficit would be a very difficult task. Inflation, however, could be the only way out of it eventually. Economic growth cannot be sped up much beyond population growth and productivity growth, both of which grow very slowly over decades. Therefore, inflation seems to be the only way to manage this deficit.  

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper. 

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Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.


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