*****
Value investing or growth investing?
When I first came here, this place was populated with value investors. People here proud to call themselves value investors, quick to ridicule the traders. Everyone trying to imitate OTB's TA and FA.
At the basic level , value investing makes sense doesn't it? Everyone wants to pay $ 1 for some thing that is worth $2. But is it really that simple? If everybody is a value investor, then just go and buy up all the dead shares, plenty of dead shares trading at 50% to 70% discounts to revalued assets and NTA.
The other mode of investing is called growth investing. In growth investing, you try to identify companies that have superlative growth. Here, historical data and Balance Sheet data plays only a secondary role. What you want to do is to employ your Business sense to the fullest. Growth investing is primarily about Business sense and good management. ....and these are off balance Sheet data. Its a more qualitative approach compared to the more quantitative approach favored by the value investors.
The last 12 months have been very punishing for the so called value investors ...and also the FA and TA specialists such as OTB. So people started blogging more and more about Business sense. That is good. I like that.
Previously, people focuses so much into historical data....last EPS and last PE, cash in Bank, . Now, we are more into sustainability of the business, growth prospects, whether it is cyclical or not, the quality of management. These are the parameters of growth investing.
Malaysia is a developing country. Foreigners come here looking for growth because a developing country offers, on average, better growth prospects compared to a developed economy.
In growth investing, you don't talk so much about Margin of safety any more ( Margin of safety is the language of value investors). In growth investing you are guided by your business sense and willingness to take calculated risks. You know some of your bets willl not work out but if you are good, enough of them will work out for you to make money.
Me? I am a growth investor. I am also a trader / speculator.
what is investing ? To me, you cannot call yourself an investor unless you are prepared to buy and hold the asset for 5 years or more to see transformational changes and at least multiple baggers. That is the desire of true equity and growth investors.
Any thing short of that are traders and trading. Investors got investor rules, Traders got traders rules. Never mix them up.
I intend to do well because I don't mix them up. Know thyself, hundred battles, hundred battlles won.
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Discussions
1 person likes this. Showing 7 of 7 comments
3iii <<<
Margin of safety remains a useful cornerstone of both value investing and growth investing.
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words still fail me. I still cannot find the right words to express myself but I know I am right ......and your method will lead to failure.
2018-09-19 15:54
3iii
a big net catches some rubbish
a small net, many fishes escape.
in physics, u can use maths to find best sized net
in stock market how?
I am a trader....a trader needs as big a net as possible.
2018-09-20 14:37
qq3<<
words still fail me. I still cannot find the right words to express myself but I know I am right ......and your method will lead to failure.
>>
<<
In growth investing, you don't talk so much about Margin of safety any more ( Margin of safety is the language of value investors). In growth investing you are guided by your business sense and willingness to take calculated risks. You know some of your bets willl not work out but if you are good, enough of them will work out for you to make money
>>
I like you. You think out of the box, lead me to a next question: How would u know the calculate the risk without FA or if the safety margin is <0% even with whopping growth?
Anyway, to me, value or growth investing is the same, the variables is growth rate estimation. In growth investing, it may be more risky as you may not know how the growth turn out to be.
Of course, I believe you know what u investing as you have a very good business sense.
2018-09-23 20:36
horse....in growth investing, there are lots more opportunities. If ever possible, my hero is Softbank, not wallen the bufalo.
its all about mindset...and how we approach stuffs. Growth investors readily admit there are lots of stuffs they don't know.
value investors tend to think they know every thing....but it is only they think they know but don't really know.
I like honesty in investing....I don't like to be dishonest when investing.
2018-09-24 00:03
mathematically speaking, people look at the PEG ratio.....the ratio between PE and growth.....and look for PEG below 1.
2018-09-24 01:39
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3iii
<<<
In growth investing, you don't talk so much about Margin of safety any more ( Margin of safety is the language of value investors). In growth investing you are guided by your business sense and willingness to take calculated risks. You know some of your bets willl not work out but if you are good, enough of them will work out for you to make money.>>>
Margin of safety remains a useful cornerstone of both value investing and growth investing.
2018-09-19 15:34