If you go by the conventional wisdom, investors come in two varieties.
On one hand, you have investors who ply their trade in the belief that the past performance of a stock has clues to its future performance. Technical investing, as it is commonly known, depends much on behavioral aspects of investing, with stock charts being the main tools of the trade.
On the other hand, you have investors who believe that investing success lies in researching the business of the company on a fundamental level, and digging deep into a business? ability to generate profits over a long term.
Fundamental investing is further divided into growth investing and value investing.
Traditional media, and indeed a surfeit of financial publications, both online and offline, take pains to point out the differences between the value investing and growth investing approach.
But at the root, all investing is value investing.
To understand this, we need to go back to the basic principles of fundamental investing. Continue Reading