In a bearish market condition, the prices of shares can decline significantly. Growth Investing: As a contrast to value investing, growth investing focuses on a company’s future potential, regardless of the current price. Bloomberg determined that such companies should be able to grow their earnings faster, which would lead to higher returns on equity and, eventually, higher share prices.
The second half of the book provides detailed profiles of eight modern value investors, many of whom are considered legends. Always use a margin of safety – Graham called this the central concept of investment. There are periods when growth stocks do well, and other periods in which value stocks excel.
Value investing seeks stocks that the market has under priced that have a potential for an increase. The one rule used by Warren Buffet and scores of other billionaire investors is to invest based on fundamental stock values such that you are, in effect, certain of buying at a low price.
This strategy states that come into the stock market when the prices as well as sentiments are depressed and selling out when prices and sentiments are exalted. Then research some companies and find which ones seem to be the best and invest some money in them, but only invest money you can afford to lose.
Value investing treats security analysis as a purely arithmetical field of study. This is a quote from Benjamin Graham’s “The Intelligent Investor”. To help them decide whether a stock is undervalued or not, the investor will want to analyze as many of a company’s fundamentals as is possible and practical – i.e. they’ll turn over as many stones as they can find.