𝐕𝐚𝐥𝐮𝐞 𝐨𝐫 𝐆𝐫𝐨𝐰𝐭𝐡? 𝐎𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐥𝐲 𝐝𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐭?
Hello everyone! I have spontaneously moved my office to the beach in Denmark to be able to work from there, escape the city and do some surfing. Coincidentally, it's mackerel hunting season here, and they hunt the bays in large swarms, circling the small fry and eating those that don't find shelter quickly enough. The mackerel, in turn, are hunted by dolphins and fishers and are part of a great cycle.
𝐓𝐡𝐞𝐲 𝐚𝐥𝐥 𝐡𝐚𝐯𝐞 𝐨𝐧𝐞 𝐭𝐡𝐢𝐧𝐠 𝐢𝐧 𝐜𝐨𝐦𝐦𝐨𝐧: 𝐭𝐡𝐞𝐲 𝐡𝐚𝐯𝐞 𝐚 𝐡𝐮𝐧𝐭𝐢𝐧𝐠 𝐬𝐭𝐲𝐥𝐞, 𝐚 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲, 𝐚𝐝𝐚𝐩𝐭𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞𝐢𝐫 𝐭𝐚𝐫𝐠𝐞𝐭: For the mackerel, the high-risk hunt is rewarded with fish; for the investor, the hunt is rewarded with returns on his invested capital or - if the risk materializes - punished with capital losses. The decision of profit and loss stands and falls (except for lucky hits) with the investment strategy. The two largest are the value and the growth strategy.
𝐓𝐡𝐞 𝐕𝐚𝐥𝐮𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲: $BRK.B (Berkshire Hathaway Inc)
The core idea of this strategy is that there are companies on the stock market whose true values are still largely unknown and which are undervalued on the stock market. The value investor now tries to sound out such companies or corporations. They often have a good market position in addition to stable profit development and above-average profitability. The investor looks at these value stocks and seeks out those that he believes are currently undervalued on the stock market compared with other companies and buys those shares. This is a speculation on that moment in the future where the market will recognize the "true" value of the company in question and that it will improve. In this way, the investor can possibly make a profit.
𝐓𝐡𝐞 𝐆𝐫𝐨𝐰𝐭𝐡 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲
In the growth strategy, investors focus less on individual companies and more on entire industries. The growth investor wants to identify growth markets of the future - for example, the biotech sector $NTLA (Intellia Therapeutics Inc) - as early as possible and then selects companies with what he sees as the highest growth momentum. These are often companies or corporations that already have major stakes in a booming market and are comparatively large in size. Unlike value stocks, where investors make their decisions based on proven business models, the growth investor makes decisions based on expectations: growths investors expect the stock price to go up because of an assumption about a business model.
𝐌𝐲 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲
In the current market environment, it is difficult to make a universal strategy decision: Last year, growth stocks rose unprecedentedly for this short period. This year, value stocks are bouncing back after being weighed down by Covid 19 fears around delta and falling bond yields. Now, growth stocks are once again in demand. In the current environment of mixed economic and inflation figures, the pendulum of investment styles is unlikely to swing any time soon, as there is too much uncertainty among market participants for that to happen, consisting on the one hand of great euphoria and on the other of much pessimism.
For my investment decisions, I always use my own strategy, which has evolved and proven itself in my more than 10 years in the capital market. Of course, it is fed by the existing strategies on the market, as one can learn a lot from others. However, I do not follow a clear growth or value strategy. This can be justified by the fact that each market phase has its own good strategies that need to be identified and executed. There are opportunities in every market phase that want to be seized. For this, one must be open and not stubbornly chase after a foreign strategy. That is what this portfolio stands for.
Warm regards from the seaside!