"In part, it is because stockmarkets are naturally inclined to overreaction. Back in 1999 and 2000 everybody wanted to buy shares in the hottest companies, and were willing to pay the equivalent of 100 years' profits for them, or indeed to buy shares in companies with no immediate prospect of profits at all. That made the value shares look very cheap by comparison and created the conditions for an extended period of catching up.
By the end of 2006 there was a much narrower range of valuations in the market. In other words, investors had to pay less of a premium to buy companies with growing profits. Growth had become cheap by historical standards."
Fonte: The Economist
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