The Vanna White Recovery

Listening to economists and the financial media forecast the road to economic recovery has begun to sound a little like a game of Wheel of Fortune. Depending on the day and the latest datapoint, viewers can expect to hear an alphabet soup of economic trajectories--V, U, W are the most common. A few prognosticators have even begun to throw in symbols such as check marks or square root signs to make their points. 

The truth is the forecasts that fit with the letters are simply educated guesses and do little to inform investors on how businesses in the same industry may fare against their peers going forward.

We’re taking a more granular approach and focusing on the long-term health and earnings prospects of businesses. The torrent of stimulus unleashed by the U.S. government has eased some of the damage brought on by the nationwide shutdown, but it has also kept afloat many zombie companies that were on the verge of foundering before the pandemic emerged. As the chart below shows, those debt-laden businesses are likely to find it even harder to generate earnings as they labor under even greater debt payments. 

Nonfinancial Corporate Debt as a % of GDP

Gross Domestic Product (GDP)
Source: Copyright 2020 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at For data vendor disclaimers refer to

Please wait while we gather your results.


Will Nasgovitz

Nasgovitz is CEO and Portfolio Manager of the Opportunistic Value Equity Strategy, as well as the Mid Cap Value Fund, the Value Fund, and their corresponding Mid Cap Value and Small Cap Value Strategies. He also is President and Director of Heartland Funds. He has 20 years of industry experience, 17 at Heartland.


Email Sign Up


©2021 Heartland Advisors | 790 N. Water Street, Suite 1200, Milwaukee, WI 53202 | Business Office: 414-347-7777 | Financial Professionals: 888-505-5180 | Individual Investors: 800-432-7856

Past performance does not guarantee future results.

ALPS Distributors, Inc., is not affiliated with Heartland Advisors.

Investing involves risk, including the potential loss of principal.

There is no guarantee that a particular investment strategy will be successful.

Value investments are subject to the risk that their intrinsic value may not be recognized by the broad market.

The statements and opinions expressed in the articles or appearances are those of the presenter. Any discussion of investments and investment strategies represents the presenters' views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. Any forecasts may not prove to be true.

Economic predictions are based on estimates and are subject to change.

There is no guarantee that a particular investment strategy will be successful.

Heartland’s investing glossary provides definitions for several terms used on this page.