It has generally been true in recent history (since the late 19th century) that value stocks have outperformed their growth counterparts, on average, in a meaningful way.
Investors touting the value investing model have largely been laughed at in recent years due to the rise in investor interest in high-risk growth plays which have made a select few very rich in a relatively short amount of time.
While a “get-rich-quick” scheme can certainly be tempting to take a look at (I am no exception), the reality remains that conservation of capital and slow-and-steady growth have dominated momentum strategies and “get-rich-quick” schemes over long periods of time.
Buying excellent companies at reasonable prices, as iconic investor Warren Buffett would attest to, should be the key focus of investors looking to build a portfolio that will last decades.
While companies which would qualify as being value stocks in a “Graham-Dodd” world are few and far between today, I am currently committed to searching for such value and buying stocks with excellent long-term potential which have been discarded by the market.
I have been looking in sectors such as the Canadian oil sands (specific companies are engaging in bringing on new technologies to boost long-term profitability and ROE, and are sitting on very lucrative properties with incredible cash flow potential for decades) which have been ignored by growth investors and which display excellent value fundamentals which make these companies potentially lucrative long-term holds.
Invest wisely, my friends.
