There are
many investing strategies, which investors use. Value investing, contrarian
investing and growth investing are mostly used investing strategies. Let’s
briefly study them.
Value
investing is the most successful investing strategy. It was founded by Benjamin
Graham, mentor of Warren Buffet. In this strategy investors see for underpriced
securities based on some formula other than market price. This formula for
ascertaining the value of the security is generally some multiple of income of
the corporation. Value investors usually have to wait for longer in order to realize
the full value of their assets.
Along with
Warren Buffet many other successful investors follow the value investing
strategy of investing. According to researches value investing proved to be the
most successful way of investing. Many
billionaire investors favor value investing over other forms of investing.
Warren Buffet, Howard Marks, Seth Andrew Klarman, Charles Brandes, Walter J.
Schloss, Irving Kahn,
Mario Joseph Gabelli, Michael F. Price are some of most successful value investors.
Another
strategy is contrarian investing. Contrarian investing is buying when other
people are selling and selling when other people are buying. Every up and down
in the overall stock market or some specific share price offers opportunity of
selling and buying to these contrarians respectively. Warren Buffet is also sometimes referred to as
contrarian investor, owing to the obvious reason of many similarities between
contrarian and value investing strategy. Other famous proponents of contrarian
investing are Michael F. Price, James Beeland Rogers, Marc Faber, David Dreman,
Mark E. Ripple, and William Albert Ackman.
Growth
investing is another strategy which many successful investors use. Those who follow growth investing strategy
invest in companies that show above average growth even when their shares seem
to be highly priced. Unlike value investors, growth investors buy stock in companies
that are trading higher than their intrinsic value-assuming that the intrinsic
value would grow eventually exceeding current valuations. These investors focus
on capital appreciation. Venture capital funds can be classified as growth
investors.
