The rivalry between value investing and growth investing is as intense as a Mets-Yankees duel. At any given time, one will outperform the other.
For example, during the Internet era, you got hung out to dry if you were a value investor. People were saying that even Warren Buffett had lost his touch, as his holding company,
Berkshire Hathaway (NYSE:
BRK-A) (NYSE:
BRK-B), languished while the likes of
Oracle (Nasdaq:
ORCL) and
Yahoo! (Nasdaq:
YHOO) racked up double-digit percentage gains weekly -- sometimes daily.
But when the dot-com bubble burst, the trophy returned to the value-investing approach, as good old-fashioned companies like
McDonalds (NYSE:
MCD) began to sizzle once again.
Care to wager which school of thought is winning today? I don't.
Value plus growth equals investing Regular readers already know that I have a value-oriented investing approach. However, I apply just one rule to my investing decisions: I'll invest only in businesses that I can understand, and that are selling at an attractive price.
I consider this approach "value investing" only in the sense that any investing decision should be based on the act of seeking out value. After all, if our goal is to realize capital gain, the way to maximize that gain is