The Death of Value Investing

Just was pointed to an article I have to comment on.

The Death Of Value Investing

by Ashvin Bachireddy, Andreessen Horowitz

(...) Most of the best investors in the world are considered value investors.  (...)

Most of whom are value pretenders!

(...)Since I started my career as an investor, value investing was the holy grail of investing (..)

Never it has been and never will it be the case. Real value investors will always suffer loneliness!

(..) the basic concept is as follows: essentially you want to buy stocks at a discount to their intrinsic value. Intrinsic value is calculated by taking a discount to future cash flows. If the stock price of a company is lower than the intrinsic value by a “margin of safety” (normally ~30% of intrinsic value), then the company is undervalued and worth investing in (...)

That's Graham and Dodds basic concept of value investing? What about net-nets? Do you use DCF to arrive to intrinsic value or does one gear to the valuation of the asset side (especially current assets) in relation of overall liabilities to come to an intrinsic value?

Graham and Dodd hardly ever speak about DCF models to value companies. Although they do not neglect the importance of cash flow generation abilitly of the assets for the valuation of a company.

Please dear authors. Just read Graham and Dodds books and Benjamin Grahams article (or just read my blog as a starter) so you get a basic understanding what Graham and Dodd value investing is about. 

Than they go on mentioning Rim as an example how value investing doesn't work. They didn't mention ones what assets in relation to liabilites was worth. Only P/E, growth and market share. Oh dear.

Than the authors hold forth about innovation cycles and so on. Only to come to the conclusion:

(...) With technology upending markets, remaining a value investor is a death sentence. 
With the rate of technology adoption accelerating, Internet being a way of life and software consuming the world, businesses who refuse to embrace or adapt don’t just slowly decline; they fall off a cliff and take their cash flows with them (...).

Well I think growth investors get hurt much more by technological innovations and revolutions than do (real) value investors, as growth paid so much of a higher price on the tangible (liquid) assets.

Conclusion:

• Article is averagely interesting, but the title is totally off the mark; should have been called "Limitations/ Danger of growth investing; it has nothing to do with the limitations of value investing (which certainly do exist)
• Value traps have always existed and will always exist; (real) value investing is not a fool proof strategy and no real value investor has ever said so
• Seems like the authors have never read Graham and Dodd; apparently they don't know a thing about the concept of value investing according to Graham and Dodd