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25edby
egnierBloomberg Businessweek December 7, 2020Investorsshifttostocksthat
The
B Team’s
Time
of Vail Resorts Inc. “There’s a lot of pent-up
demand for leisure travel.”
This type of thinking has been dominating Wall
Street in recent weeks. The economy isn’t really
back, but the market is ready to assume it will
be. And promising vaccine developments have
investors betting on the companies they think will
benefit the most from a return to normal. Shares
of Vail Resorts—a longtime holding of the Baron
fund—rose almost 19% in November, compared
with about 11% for the S&P 500. Before November,
the stock had been lagging the S&P in 2020.
Investment pros are calling this a long-awaited
rotation: away from the technology-driven
mega-companies, such as Amazon.com,
Facebook, and Alphabet, that have been the
undisputed stars of this bull market and toward
theBteamof...well,almosteverythingelse.
Besidescyclicalsectorsofthemarketthatrise
andfallwiththeeconomy,suchastravel,leisure,Edite
ALAMY PatRe
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depend on economic recovery
TheCovid-19pandemichasdone
tremendousdamage totheU.S.
economy—especially the parts
thatcanthriveonlywhenpeople
arewillingtoleavetheirhomesand
spendsomemoney. Buttheway
MichaelBaronseesthings,“it
can’tflattenVailMountain.”The
famousski destination “is still
there,andpeopleareitchingtogo
away,” says theco-managerof
theBaron Partners
Fund, which
ownssharesandfallwiththeeconomy,suchastravel,leisure,
energy,financial,andindustrialcompanies,the
ror tationhasalsomeantbetterperformancefrom
smallercompaniesandnon-U.S.stocks.
Valuestocks—thosethattypically
tradeatlowpricesrelativetotheir
earnings—areparticularlyhot.The
Russell 1000 ValueIndexjustfin-
isheditsbestmonthever witha
1 3%gain.Itscounterpartindexof
high-pricedgrowthstocksgained
1 0%.Meanwhile,the Russell 2000
Indexofsmall-capcompaniesrallied
18%inNovember.Exchange-traded
fundsthatinvestinfinancial
companies saw their
biggest month of
cegg
inflloows sinc