Are there really two schools of investment thought and practice: one we call "value" and another we call "growth"? Or are they only one in the same? Warren Buffett and Charlie Munger have touched on this question. I would like to explore it.
When asked their investment philosophy, we have all seen money managers respond that they are "Growth Investors" or "Value Investors". And as a practical matter these two investment camps do exist, or least they prefer to distinguish themselves from one another. Of course such differentiation may be no more than a marketing tool. People love labels. We think that if we can place a label on a subject that we have somehow gained knowledge of it. How would a political campaign be run without the labels of liberal or conservative? Without such handles many people would not know who they think they should vote for. What are the differences between growth and value investing?