(A MIX OF VALUE AND GROWTH)
DEREK FOSTER: The Idiot Millionaire
CHARLES MARLEAU: The Young Blood
PAUL HARRIS, BILL HARRIS, AND PAUL GARDNER: The Three Amigos
NORMAN LEVINE: The Opportunist
Fundamental investors use a mix of value investing and growth investing principles to inform their investment decisions. While fundamental investors select their securities based on a company’s fundamentals (for example their assets, cash flow, net income, and so on), they are at the same time mindful of value and growth. These investment paradigms are not mutually exclusive from a fundamental investor’s perspective. The benefit of fundamental investing is that the stocks in a fundamental investor’s portfolio are usually not grossly undervalued (value stocks) or overvalued (growth stocks), but somewhere in between. That’s not to say that fundamental investors don’t occasionally seek out mispricings in stock prices or opportunities in high-growth companies, but those are the exceptions rather than the rule. The risk inherent in fundamental investing is if a fundamental investor sways in the market, and switches regularly between growth and value as market conditions evolve. They must be decidedly fundamental, in that they don’t invest in value stocks or growth stocks, but quality stocks that meet both criteria.