One of the landmark events on the calendar of investors took place last month—the Value Investing Congress in New York. But it behooves us to remember that an alternative approach also exists—that of growth investing.
While the two styles share many common principles, growth investing focuses on identifying companies with above-average growth rates, whose share prices today are considered inexpensive relative to their intrinsic value over the long term.
The dearth of investors who publicly tout the principles of growth investing is one sign that its golden age may now be upon us. The Wikipedia entry on “Value investing” lists more than a dozen current well-known value investors including Berkshire Hathaway chairman Warren Buffett. Value investing is a sensible discipline, and its success has attracted many acolytes. When too many people are performing the same analysis and arrive at the same conclusion, however, it becomes the crowded trade.
Human endeavor creates value. Healthier people endeavor more. Thus, health is a creator of value, of prosperity. The converse is also true. Wealthier societies demand more healthcare. When life is grand, people want to live longer and they want to maintain healthy bodies. Therefore, health and wealth form a virtuous, feed-forward cycle.