Warren Buffett’s business partner Charlie Munger famously said that “all intelligent investing is value investing, acquiring more than you are paying for”. Yet professional investors are regularly defined by their ‘investment style’.
When asked who Benjamin Graham was, most investors would describe him as ‘the father of value investing’ while Peter Lynch was known to focus on investing in companies that he believed would grow faster than average. The labels provide a shorthand to help investors quickly describe the approach of an investor.
In common with other stereotypes, the labels ‘growth’ and ‘value’ naturally oversimplify the approach adopted by investors, especially those such as Graham and Lynch who were highly skilled as investors. Nevertheless, the division between value and growth has become the embedded in the way people think about investment.
