Lazard's Philipp Hofflin reveals how the stock market really works

Value portfolios always win... because they have better growth.
The Rules of Investing

Livewire Markets

We’ve got a slightly different episode for you today on The Rules of Investing. A departure from the norm!

A lot has been said about the change from growth investing to value investing – a shift that has been easy to see in aggregate. In 2022, the MSCI world growth index was down 29.05%, compared to just -6.5% for the MSCI Value index.

But indices are just that - aggregates. They do little to explain the why behind the what.

Why has this shift occurred? What signals should investors watch? How should we interpret these signals? And what traps lie in weight to catch out investors?

In short - how does the stock market actually work?

To answer these questions and more, we're joined by Dr Philipp Hofflin, portfolio manager on the Australian Equity team at Lazard Asset Management. Phil's an expert in market bubbles - how they grow and, importantly, how they burst. So, he's the perfect guest to break it all down. 

(He also happened to be the most popular ROI guest in 2022).  

Note: This episode was recorded on Monday 30 January 2023. 



  • 3:20 – “The central bank always wins”
  • 5:15 – The most striking US market change since last September
  • 8:00 – Why 2023 will be a tough year, but less so for Australia
  • 10:30 – Recessions are almost always unexpected – and what this means for investors
  • 11:00 ­– Will the Fed’s slowing of rate hikes flow onto RBA
  • 14:00 – The normalisation of equity valuations is only halfway through
  • 17:00 – 80% of market volatility is driven by noise – only 20% by fundamentals
  • 28:30 – The surprising reason Value always beats Growth
  • 36:00 – Why migrations are so important for Value portfolios
  • 39:00 – How Lazard ascribes value to companies
  • 42:00– A case study of James Hardie (ASX: JHX)
Managed Fund
Lazard Australian Equity Fund (W Class)
Australian Shares

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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...

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