Systematic value strategies have had one of the worst performing periods in their history in the past decade. This extended underperformance, coupled with changes in the market and economy that many argue are unfavorable for the strategy have led many to question whether it is permanently broken. 
As believers in the strategy, we have a natural tendency to discount these arguments and to invite on guests who support our opinion. So in this episode, we wanted to counteract that bias and look at the other side of the coin.  
We are joined by Applied Finance founder Rafael Resendes, who has been a vocal critic of traditional approaches to value. We talk about why traditional value may not produce the kind of results many value investors are looking for going forward and examine the arguments against the strategy.  
We discuss:  
- the difference between value and cheapness 
- the importance of economic profit 
- the case against the investment factor 
- the five factor model he built to address deficiencies in popular academic models  
We hope you enjoy the discussion.  
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Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.
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