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The terms “growth” and “value” nowadays are silly mechanical definitions that bear little relationship to any intelligent investing strategy. The worlds premier

The terms “growth” and “value” nowadays are silly mechanical definitions that bear little relationship to any intelligent investing strategy. The worlds premier “value” investor Warren Buffett was buying Pepsi and Coke stock 50 years ago, and owns more Apple now than anyone. Buffett will tell anyone who will listen that value investing is purchasing investments at discount offering a good margin of safety to a reasonable estimate of intrinsic value. Low price to book value or low price to earnings don’t remotely comprise the universe of good value investments.

adthomsen 6y ago
I have only recently started reading about investment and the concept of value investing and your comment doesn't seem to encapsulate what I've understood. There are also things like the company's management and how they run the company. It's about looking for "wonderful companies" at a good price. I'm not saying which investment strategy is better or worse, just that I believe there is a lot more to Buffet's idea of value investment than you imply.
- divbzero 6y ago
  You and GP are both right but simply referring to different definitions of value investing. GP is using “value” in the traditional Benjamin Graham sense of companies that are quantitatively undervalued based on current financial statements. This is the definition used on Wall Street for “value” ETFs or mutual funds. You’re referring to Warren Buffett’s expanded definition of “value” as any company priced below intrinsic value, which can include qualitative judgment of future growth. You both make the point that Buffett’s approach deviates from the traditional Wall Street definition of “value”.
- valuearb 6y ago
  The definition of intrinsic value comprises everything you mention and more, such as strength of companies moats. I didn’t want to write a dissertation. And the least important factor for long term value is strength of management. GE was renowned as the greatest managed company in the world before Immelt. You want a business any idiot can run, because eventually one will.
mxschumacher 6y ago
Additionally, book values have become much less meaningful over time. Many leading companies in the pharma or software space don't have large tangible assets to speak of. If you want to understand google, you won't find much valuable information in their balance sheet.

adthomsen 6y ago

I have only recently started reading about investment and the concept of value investing and your comment doesn't seem to encapsulate what I've understood. There are also things like the company's management and how they run the company. It's about looking for "wonderful companies" at a good price. I'm not saying which investment strategy is better or worse, just that I believe there is a lot more to Buffet's idea of value investment than you imply.

divbzero 6y ago
You and GP are both right but simply referring to different definitions of value investing. GP is using “value” in the traditional Benjamin Graham sense of companies that are quantitatively undervalued based on current financial statements. This is the definition used on Wall Street for “value” ETFs or mutual funds. You’re referring to Warren Buffett’s expanded definition of “value” as any company priced below intrinsic value, which can include qualitative judgment of future growth. You both make the point that Buffett’s approach deviates from the traditional Wall Street definition of “value”.
valuearb 6y ago
The definition of intrinsic value comprises everything you mention and more, such as strength of companies moats. I didn’t want to write a dissertation. And the least important factor for long term value is strength of management. GE was renowned as the greatest managed company in the world before Immelt. You want a business any idiot can run, because eventually one will.

mxschumacher 6y ago

Additionally, book values have become much less meaningful over time. Many leading companies in the pharma or software space don't have large tangible assets to speak of. If you want to understand google, you won't find much valuable information in their balance sheet.