John Rogers Says Analysts Are Ignoring Some Of The Market’s Best Opportunities

The current equity market presents a complex puzzle for investors seeking alpha outside the crowded megacap space.

At the Gabelli Omaha Value Investor Conference, John Rogers, founder and co-CEO of Ariel Investments, argued that this environment resembles prior turning points in market leadership.

In his view, large-cap growth has enjoyed an extended run, but the valuation gap between popular growth stocks and overlooked value names now looks historically stretched.

“This reminds me a lot of the turn of the century when the internet stocks were booming and eventually that shifted, the S&P collapsed, and small value outperformed dramatically afterwards, and I think that’s exactly where we are in today’s markets.”

Success in this climate requires a fundamental rejection of momentum-chasing. Rogers champions a philosophy he calls active patience, a phrase coined by his co-CEO Mellody Hobson to describe staying flexible while maintaining a long-term horizon.

The strategy is rooted in a simple but difficult idea: true outperformance often comes from buying quality businesses when fear, neglect, or temporary turmoil creates unusually attractive prices.

“I think after doing this these 43 years I’m more convinced than ever that the stock market is really really efficient, we’re playing a very difficult game to outperform, and the times where you have an opportunity to do that is when a company or an industry or the markets themselves are going through extraordinary turmoil. And that’s sometimes where you have a chance to find those bargains.”

One area where Rogers sees significant value is sports and entertainment, particularly the James Dolan-controlled entities. Although these companies have historically drawn skepticism from parts of the market, Rogers views the underlying assets as premier franchises with durable competitive advantages.

He points to Madison Square Garden Entertainment, “owns the garden, which is the world’s greatest arena.” Beyond the physical venue, he sees substantial upside in the global expansion of sports leagues, especially the NBA.

“One of the things that I think is underestimated for the NBA is that you know United States basically makes up less than 10% of the eyeballs in the world.”

Ultimately, Rogers believes the opportunity for value investors lies in areas ignored by the broader herd. While AI and large-scale technology dominate headlines, the disconnect between small-cap value and large-cap growth has reached extreme levels.

“We think what happens in that kind of an environment is the analysts stop doing really good research because no one’s calling them about those ideas.”

By staying within a defined circle of competence and focusing on companies with strong balance sheets, attractive returns on equity, and durable franchises, investors can position themselves for a shift in market leadership. As Rogers notes, “it’s a fun business to be in.”

Full interview here: