The modern value investor needs to be more concerned with Macro issues

Sometimes it does not surprise me that most respected value investors of the last 50 years have been based in the USA.

Here is an economy where they have enjoyed a (1) stable political system and (2) currency with (3) continuous access to capital markets for funding. Hence the bet on a cyclical recovery always worked! Buying value therefore generally always paid off!

However, today we are seeing structural changes occur which will change the economic structure and the role of different economic participants in a drastic manner. Here the cyclical bet is more likely to go wrong we feel - as countries are competing with each other as well as companies within a country and outside the country.

This means currency management needs to become a more important part of the valuation equation, forcing the current value investor to be more concerned about MACRO issues.