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Value investing: you try to come up with an intrinsic valuation of a security and buy if market price is, say, 60% or lower of that valuation. Famous examples:
by H8crilA 7y ago
Value investing: you try to come up with an intrinsic valuation of a security and buy if market price is, say, 60% or lower of that valuation. Famous examples: Benjamin Graham, Warren Buffet, Michael Burry.
Growth investing: buy whatever grows (earnings, revenue, even DAU are all flavors of growth investing). VC investing/startup investing is classic growth investing. PG on the topic: http://www.paulgraham.com/growth.html http://www.paulgraham.com/growth.html
Growth stocks are usually overpriced because of hype (looking through rose glasses), but can still be good, as the last 10 years shows.
- H8crilA 7y agoJust to throw some data into the mix: the biggest difference is not between growth or value. It's between US and ex-US equities: https://www.portfoliovisualizer.com/backtest-asset-class-allocation?s=y&mode=1&timePeriod=4&startYear=1972&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&initialAmount=10000&annualOperation=0&annualAdjustment=0&inflationAdjusted=true&annualPercentage=0.0&frequency=4&rebalanceType=1&absoluteDeviation=5.0&relativeDeviation=25.0&benchmark=VFINX&asset1=LargeCapValue&allocation1_1=100&asset2=LargeCapGrowth&allocation2_2=100&asset3=IntlDeveloped&allocation3_3=100&total1=100&total2=100&total3=100 https://www.portfoliovisualizer.com/backtest-asset-class-all...