This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Pzena Investment Management's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Rich Pzena

Thanks Greg. As I look back on 2011, I can’t help but feel drawn back to what it felt like in early 2000 for value investors. Back then momentum had driven Internet stocks to astounding valuations and value investing had lagged for almost five years. Investors were proclaiming the depth of value and a number of long term value investors closed shop, while others changed their strides, of course exactly at the wrong time.

Today investors are once again question whether value investing really works. Despite a strong rebound that started in November 2008 and lasted through early 2011, the market correction and value under performance during the latter half of the last year has rekindled bad memories of the financial crisis and let investors to question whether identifying good, but under valued companies still works, in a world that seems driven by global macro events rather than fundamentals. Investors have fled end mass to safety as the financial crisis in the euro zone creates massive uncertainty and fear that it’s effects will spill over and affect the global economy.

But taking a step back from the day-to-day market noise provides a useful perspective in which to assess recent market activity and possibly even identify hidden opportunities otherwise unsecured.

We studied the cycles of value investing, going back over 40 years, by measuring the performance of a naïve deep value benchmark, to find us the cheapest quintile of the 1000 largest U.S. listed companies on a price to book value basis, versus the S&P 500 index and of a number of key observations.

One, the cycles of value investing tend to be long, almost 10 years on average, with deep value outperforming for almost seven of these years.

Two, over the last four full value cycles dating back to the late 1960s, deep value has outperformed the S&P 500 by 480 basis points per year.

Read the rest of this transcript for free on

3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs