Three possible factors explain this phenomenon, in Pease's view. Stocks simply are rotating less between value and growth, the valuation gap “between securities exiting and joining the value group [is] becoming more compressed," and the correlation of rotation volume and valuation spreads is dropping.

The real question is why, and Pease concedes it may be a question for another day. But among the possible answers is that growth companies are enjoying more sustainable profitability, lending “credence to the fundamental shift theory.” Finally, there has been a slowdown in the number of takeovers of cheap companies.         

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