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How is that different from just… normal investing?

maerF0x0 3y ago
EDIT: My hobbyist, lay understanding, this is not investment advice, I likely have errors in my understanding I've seen Growth and Technical investing be contrasted to Value. Growth being looking for companies which have not actualized revenue goals but appear to be able to do rapidly(they're growing, look for the ones that grow fastest), Technical is looking at trends and patterns (they're trending, catch the trend and get off before others do). In my lay understanding Value investing looks for margins of safety through companies which are worth more on the books than they're shares are selling for, or where their cashflows make them look attractive relative to bonds of their equivalent grade. An example might be if AAPL took a nose dive and was selling for less than $167B (which is their cash on hand) that'd be an excellent Value play. Or assume their equivalent bond rate was Single-B (Currently 9.5%) and their Price to earnings rate was less than 10.5 --> Buying AAPL would be similar to buying a Grade B bond for less than the current market rate.
- bluGill 3y ago
  Growth is about future value, which is subtilty different from what you said. You make predictions on what the company will earn in the future. Value by contrast is looking at current earnings. Both are predictions of the future value, one just weights the current earnings high. While you often have a bias to one, generally you should consider both. Don't buy current income if growth says the company will collapse. Don't buy growth if the company won't grow to support the value in the future.
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FredPret 3y ago
Most people buy exciting stocks, not cheap stocks (cheap relative to intrinsic value). Value stocks are by definition boring and unknown. Think iron ore mines, regional banks, house builders, carpet makers, and other yawn-fest-profit-machines.
- bluGill 3y ago
  Value stocks can be well known. Fortune 100 companies sometimes are great values.
  - FredPret 3y ago
    If it's well known and great value, it's got to be boring. For the most part, they're just completely unknown though - most people could name maybe 5 public companies, nevermind 100.
evolve2k 3y ago
Former Financial Advisor [This is not personal financial advice]: Stock prices go up and down, but usually your goal is to buy stocks low and sell them high. Growth investing looks to trending sectors and companies and lets say 'bets' on a certain future playing out and thus being good for certain companies. Value investing is an investment strategy where you deep dive on the financial fundamentals of a company and determine your own measure of worth, or what is sometimes called a fundamental value. In essence your own financial calculations give you a fundamental value that you think the stock is "actually" worth. Having done this for a number of companies you then keep track of the market, and when, and only when, the stock price drops below your own fundamental value price then you buy. Munger and Buffet would pair this approach to also planning to hold the stock for the long term and see themselves as owning part of the business over many years. Often a stock might drop when the growth story turns against it (eg. AI is more exciting than crypto stories now), and this is likley when Value investors would get into a stock as it was now below their fundamental valuation and hence predicted on their models to go back up over time. Mutual fund managers can often be classified as having a value or growth or index approach (and others). And for most normal investors it's usually good advise to take advantage of diversification and back a few different approaches in building a long term focussed portfolio.
- audray124 3y ago
  This confidence and trust has been what I have craved for in an expert trader for years now and I am so happy to finally get all this from you Lady Maria Fx for you have proven all what I have heard about you is the true, by investing $500 with you, I made $6,500, it not the profit alone I am glad about but the instant withdrawal into my bank account, I am forever grateful and will tell the world about you, get in touch with Lady Maria Fx today on WhatsApp:+1 (732)630-9483

EDIT: My hobbyist, lay understanding, this is not investment advice, I likely have errors in my understanding I've seen Growth and Technical investing be contrasted to Value. Growth being looking for companies which have not actualized revenue goals but appear to be able to do rapidly(they're growing, look for the ones that grow fastest), Technical is looking at trends and patterns (they're trending, catch the trend and get off before others do). In my lay understanding Value investing looks for margins of safety through companies which are worth more on the books than they're shares are selling for, or where their cashflows make them look attractive relative to bonds of their equivalent grade. An example might be if AAPL took a nose dive and was selling for less than $167B (which is their cash on hand) that'd be an excellent Value play. Or assume their equivalent bond rate was Single-B (Currently 9.5%) and their Price to earnings rate was less than 10.5 --> Buying AAPL would be similar to buying a Grade B bond for less than the current market rate.

bluGill 3y ago
Growth is about future value, which is subtilty different from what you said. You make predictions on what the company will earn in the future. Value by contrast is looking at current earnings. Both are predictions of the future value, one just weights the current earnings high. While you often have a bias to one, generally you should consider both. Don't buy current income if growth says the company will collapse. Don't buy growth if the company won't grow to support the value in the future.

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FredPret 3y ago

Most people buy exciting stocks, not cheap stocks (cheap relative to intrinsic value). Value stocks are by definition boring and unknown. Think iron ore mines, regional banks, house builders, carpet makers, and other yawn-fest-profit-machines.

bluGill 3y ago
Value stocks can be well known. Fortune 100 companies sometimes are great values.
- FredPret 3y ago
  If it's well known and great value, it's got to be boring. For the most part, they're just completely unknown though - most people could name maybe 5 public companies, nevermind 100.

evolve2k 3y ago

Former Financial Advisor [This is not personal financial advice]: Stock prices go up and down, but usually your goal is to buy stocks low and sell them high. Growth investing looks to trending sectors and companies and lets say 'bets' on a certain future playing out and thus being good for certain companies. Value investing is an investment strategy where you deep dive on the financial fundamentals of a company and determine your own measure of worth, or what is sometimes called a fundamental value. In essence your own financial calculations give you a fundamental value that you think the stock is "actually" worth. Having done this for a number of companies you then keep track of the market, and when, and only when, the stock price drops below your own fundamental value price then you buy. Munger and Buffet would pair this approach to also planning to hold the stock for the long term and see themselves as owning part of the business over many years. Often a stock might drop when the growth story turns against it (eg. AI is more exciting than crypto stories now), and this is likley when Value investors would get into a stock as it was now below their fundamental valuation and hence predicted on their models to go back up over time. Mutual fund managers can often be classified as having a value or growth or index approach (and others). And for most normal investors it's usually good advise to take advantage of diversification and back a few different approaches in building a long term focussed portfolio.

audray124 3y ago
This confidence and trust has been what I have craved for in an expert trader for years now and I am so happy to finally get all this from you Lady Maria Fx for you have proven all what I have heard about you is the true, by investing $500 with you, I made $6,500, it not the profit alone I am glad about but the instant withdrawal into my bank account, I am forever grateful and will tell the world about you, get in touch with Lady Maria Fx today on WhatsApp:+1 (732)630-9483