{"id":1720,"date":"2021-03-18T11:06:45","date_gmt":"2021-03-18T11:06:45","guid":{"rendered":"https:\/\/emeraldvp.com\/?p=1720"},"modified":"2021-03-18T13:47:06","modified_gmt":"2021-03-18T13:47:06","slug":"value-vs-growth","status":"publish","type":"post","link":"https:\/\/emeraldvp.com\/en\/value-vs-growth\/","title":{"rendered":"Value vs Growth"},"content":{"rendered":"
It is almost inevitable nowadays for any of us not be affected by local currency fluctuations,\u00a0#cryptocurrency<\/strong>\u00a0movements,\u00a0#realestate<\/strong>\u00a0prices, record breaking\u00a0#equitymarkets<\/strong>\u00a0and stock price mania of companies like Tesla, Amazon etc.So what is really happening? Is there one single cause for all of this volatility or many causes happened to merge all at once?It has been decades since Benjamin Graham wrote “#TheIntelligentInvestor<\/strong>“, holy book of\u00a0#valueinvesting<\/strong>. There has been so many living legends following in his theory’s footsteps like\u00a0#StanleyDruckenmiller<\/strong>, Warren Buffett, Charlie Munger and many others. The idea was to define a group of companies with high quality, low debt, low price\/earning ratio (preferably lower side of 0-20 range) and stick with them for the long term, adjust a few every once in a while.<\/p>\n

To highlight again here, a company was grouped “valuable” when it’s PE ratio was from 0 to 20 along with other key indicators in place. As of March 18, 2021, PE ratio for Tesla is above 1,000 (no typo here, with three zeros), while its 440 for Shopify and 75 for Amazon. Experts are split into 2 main theories on this absurdity. First opinion is that this is nothing but a\u00a0#bubble<\/strong>\u00a0that is about to crash and second opinion is that these companies are really the future and the markets are pricing the extremely good looking\u00a0#earning\u00a0<\/strong>potential along the line. Obviously, fore mentioned legends are among the former group while futuristic, tech-minded investors like\u00a0#CathieWood\u00a0<\/strong>are in the latter group.<\/p>\n

This is a big issue and it is touching everyone\u2019s financial life one way or another. Ever since Mark Zuckerberg met\u00a0#SeanParker\u00a0<\/strong>and followed his advise for \u201cnot monetizing the business model too early and avoid his experience with\u00a0#Napster\u201d<\/strong>, high debt oriented, data-driven, supercharged growth came on stage. This has changed the way founders and investors functioned. The new idea is getting as much credit as possible, not even thinking about making profits for the foreseeable future. Your growth will be so fast that competitors can\u2019t even dream of catching up with your pace. And once you capture the targeted data and the market share, it is the perfect moment to sit back, relax and think of million ways to monetize it. Be it via advertisement or subscription etc. A quick research topic, please take the time to go ahead and see if\u00a0#whatsapp\u00a0<\/strong>is making any profits.<\/p>\n

As a consequence of this\u00a0#3rdWorldWar\u00a0<\/strong>between\u00a0#Value<\/strong>\u00a0vs\u00a0#Growth<\/strong>, a very long list of pros and cons can be created. Only time will tell which one is more righteous and which will prevail. I am not sure why this has to be a black or white matter, just like in any other intellectual argument. One can diversify in all groups of assets just like having a balanced life. So please everyone, whatever decision you are about to make for your personal or corporate financial future, try to have a balanced and well-diversified decision making process filtered from feelings. It is wild out there and radical decisions can be very costly in a world we can\u2019t even clearly define what \u201cvaluable\u201d means.<\/p>\n<\/section>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

It is almost inevitable nowadays for any of us not be affected by local currency fluctuations,\u00a0#cryptocurrency\u00a0movements,\u00a0#realestate\u00a0prices, record breaking\u00a0#equitymarkets\u00a0and stock price mania of companies like Tesla, Amazon etc.So what is really happening? Is there one single cause for all of this volatility or many causes happened to merge all at once?It has been decades since Benjamin […]<\/p>\n","protected":false},"author":2,"featured_media":1725,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"yoast_head":"\nValue vs Growth - Emerald Value Partners<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/emeraldvp.com\/en\/value-vs-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Value vs Growth - Emerald Value Partners\" \/>\n<meta property=\"og:description\" content=\"It is almost inevitable nowadays for any of us not be affected by local currency fluctuations,\u00a0#cryptocurrency\u00a0movements,\u00a0#realestate\u00a0prices, record breaking\u00a0#equitymarkets\u00a0and stock price mania of companies like Tesla, Amazon etc.So what is really happening? 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