Against a backdrop of accommodative monetary policy, the importance of growth to valuation has risen exponentially. The classic barometer for ‘margin of safety’ has also shifted – from absolute valuation to relative growth. With sustainable growth in short supply, investors are sacrificing ROIC in favour of accessing growth models. Across our value coverage, earnings concerns are being more heavily penalised, with investors selling both the rumour and the facts. The market’s disregard for valuation has wrong-footed investors and may ultimately leave the task and opportunity for price discovery to non-market participants.