• Tom Hancock runs the $8.1 billion GMO Quality fund, which has beaten 99% of its peers for 10 years.
  • Hancock adopts a strategy that involves quant research, quality assessment, and stock analysis.
  • He breaks down the three buckets of stocks in his fund and shares four high-quality picks.

In another sign of the economic reopening sweeping through markets, Netflix (NFLX) opened almost 8% lower on Wednesday after the streaming giant reported a huge subscriber miss the day before.

With 75 million Americans fully vaccinated, the desire to go outside has not only hurt Netflix but also other stay-at-home darlings including Zoom (ZM) and Peloton (PTON), which have dropped 10% and 34% respectively this year.

While some investors are grappling with the dawning realization that high-growth stocks cannot keep soaring forever, others have rotated into cyclical value stocks for a recovery play. But it doesn’t have to be one or the other.

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