Value returns to stock market?

Guambat railed over the last several years at the seemingly absurd rise of the global markets, driven, he reckoned, but the creation of money by private equity and the cheap ass yen and the easy Greenspan credit regime. As prices were marked ever higher, Guambat failed to be convinced that value was keeping up.

Alas, that has appeared to be the case, at least in part confirmed by the following:

Hedge Funds Reduce Stock Holdings

"Hedge funds may have returned closer to their roots as 'hedged' investors, less dependent on market direction to produce returns, migrated away from the levered long strategies that many funds pursued during the upward-trending market of 2002 to 2006," [according to David Kostin, who leads Goldman's New York-based portfolio strategy team].

Net holdings of equities decreased to 17 percent from 47 percent a year ago. Hedge funds now own 3.5 percent of U.S. stocks, down from 4.5 percent in the third quarter, he said.

With only another 17% of equity holdings left to go in the hedge funds, perhaps momentum will subside and value will return to the stock markets.