Cherry Picking The Diamonds From The Stock Market

If academic research demonstrates that value stocks have higher returns than growth stocks why not invest all?

in value stocks?

Because that will get you fired periodically. Lots and lots of value managers have severely underperformed (and, as a result, lost a lot of client business) during the Internet boom.

It is not uncommon for value strategies to produce a disaster every now and then. Charles Munger, Warren Buffett's sidekick, had done very well over the long haul (he ran his own firm between 1962 and 1975), but still produced 30-percent losses two years in a row (1973 and 1974)…