2 of the most popular schools of investing are value investing and growth investing. Each school has its merits and drawbacks. And, each approach has generated life-changing wealth for successful adherents.
The major risk for value investors is that they are buying stocks that are cheap because the market is expecting a deterioration in the business’ earnings power often due to outside forces. A major example is Intel (INTC) which has posted impressive financials, yet its stock has underperformed as its chip technology fell behind competitors which indicates future weakness in revenue growth and pricing power.
