Value Investing

Sooner or later, every company’s growth prospects hit a wall. Companies that grow rapidly have an even tougher time, as the corporate culture is built around rapid expansion and growing market share as quickly as possible. Technology firms, in particular, face intense competition and short product-development cycles,  making it… Read More

In recent years, Warren Buffett seems to have drifted from his roots. The legendary investor was a pure disciple of Graham & Dodd, seeking out companies that possessed clear tangible value, either in the form of a rock-solid balance sheet or under-appreciated equity in its brand. More recently, Buffett started to look like a lot of other portfolio managers, shifting into stocks that were in high-growth mode. More important, he no longer seemed inclined to hold stocks for the long haul, shuffling some positions with — for him — a high… Read More

In recent years, Warren Buffett seems to have drifted from his roots. The legendary investor was a pure disciple of Graham & Dodd, seeking out companies that possessed clear tangible value, either in the form of a rock-solid balance sheet or under-appreciated equity in its brand. More recently, Buffett started to look like a lot of other portfolio managers, shifting into stocks that were in high-growth mode. More important, he no longer seemed inclined to hold stocks for the long haul, shuffling some positions with — for him — a high degree of frequency. And when he bought into risky but potentially lucrative special investments from the likes of Goldman Sachs (NYSE: GS) at the height of the financial crisis, the Buffett we once knew seemed to have truly changed his stripes. (That Goldman stake is now worth more than $5 billion and will likely be bought out by Goldman in coming quarters.) You can’t blame him. Value investing hasn’t been as profitable as in decades past and Buffett simply learned to “beat the market at its own game.” Kudos to the elderly investor for showing the flexibility… Read More

For more than a century now, small-cap stocks have outperformed large caps quite reliably. Sure, some years are better than others and some years are downright bad. But throughout the past 80 years, small caps have averaged an annual gain of 11.0%, while large caps have averaged an annual gain… Read More

So far this year, the market (as measured by the S&P 500 Index) has rallied almost 5%. In stark contrast, this leading big-box retailer is down about 15% to start off 2011 and is trading near its lows of 2010. I can’t find any valid reason for this near-term… Read More

Given the popularity of Apple’s (Nasdaq: AAPL) iPhone and Google’s (Nasdaq: GOOG) Android phones in the United States, it would be tempting for investors to think the growth story behind the smartphone revolution is almost over. But that’s not the case. In fact, it may be just… Read More