Abstract: John W. Rogers is the founder of hedge fund Ariel Investments. He has successfully predicted that the United States will avoid economic recession in 2023 and predicted the rebound of U.S. stocks. Now, he believes that large technology companies in the U.S. stock market have gone too far and the market needs to adjust, while small and mid-cap stocks are expected to rise. Therefore, he advises investors to focus on the prospects of small-cap stocks.
John W. Rogers, founder of the hedge fund Ariel Investments, believes that the U.S. stock market has reached a time when it needs to adjust. He pointed out that the stock market rally driven by the "Big Seven" has clearly gone too far, and starting in the fourth quarter, small-cap stocks began to show signs of rebound. Therefore, investors should start paying attention to the prospects of small-cap stocks.
John W. Rogers has successfully predicted in the past that the United States will avoid a recession in 2023 and predicted a rebound in U.S. stocks. In an interview with the media on March 11, Rogers bluntly stated that judging from historical data, the valuation of large-scale growth stocks like Nvidia is already too high, and the market is too optimistic about its profit expectations. He believes that the recent investment boom triggered by artificial intelligence is similar to the Internet bubble period in 2000, and the stock market may face the risk of a sharp correction.
Rogers said: "We haven't seen any major corrections in the stock market or the economy in a long time, and now the market looks particularly fragile and we appear to be more susceptible to a major correction." Although the "Big Seven" will push the S&P 500 in 2023 The index made most of its gains, but Rogers noted that small-company stocks started to rise in the fourth quarter, as was the case during the dot-com bubble burst. Therefore, there may be quite a few opportunities investing in small-cap and value stocks right now.
Ariel Investments is a hedge fund company with nearly US$15 billion in assets under management, focusing on investments in small and medium-sized companies. They adhere to a long-term perspective and a "constantly active investing" strategy. Some of the company's top picks include Mohawk Industries and Royal Caribbean Cruises.
Media analysis believes that although Ariel Fund’s performance in 2023 is slightly lower than the market average, its long-term performance has verified the superiority of the strategy of continuing to invest in small and medium-sized companies. Ken Kuhrt, executive vice president and portfolio manager of Ariel, pointed out that although consumers are cautious about consumer spending such as cars, they remain enthusiastic about experiential consumption, such as cruise travel. Therefore, the fundamental factors driving economic growth remain solid.
According to data compiled by the media, the Ariel fund will return about 16% in 2023, slightly lower than the 24% of the S&P 500 index, but in line with the Russell 2500 value index.
Rogers said Ariel funds have consistently outperformed the S&P 500 and Russell 2500 benchmarks for as long as a decade since their inception, demonstrating the success of their long-term investment philosophy.
