On Value vs High Growth Investing

I’m going to make one last comment on this subject, as we have these value trolls who come to our board to tell us we should be investing in Value (slow growing) companies instead of our High Growth companies growing revenue at 75% or so, with high gross margins and more than 120% of income recurring.

I thought it would be worthwhile reprinting the following (brought up to date), from my end of the month summary:

Here are my last five years of results compounded, which you can compare against the S&P. Remember that I’m not just picking my results off the wall. I posted my positions and their sizes every month of those five years so any one who wanted to check me out could have done so. It’s real, and others on the board have done approximately the same, some a little better and some a little worse, but in the same range. It can be done, although I strongly doubt that we will ever have another year like 2020.


**2017:  	+  84.2%**
**2018:   +  71.4%**
**2019 	+  28.4%**
**2020  	+ 233.3%**
**2021	+  39.6%**

In five years, those numbers compounded to 1886% of what I started with. That was not up 88% or even 188%! It was about nineteen TIMES what I started with in January of 2017, in five years, which is really, really, crazy numbers, (and shows the power of compounding!)

During that time the S&P was up 112% in five years, even with 2021’s large gain (large for the S&P). That’s up 112% compared to up 1786%!!! You can add a few percent by adding in dividends, but that doesn’t change the comparison at all.

If you are thinking that that’s impossible and that noone could do that , here is what GauchoRico posted for his four year results: He was up 1,135% while I was up 1,251%. https://discussion.fool.com/gauchorico-portfolio-update-1312021-… Pretty much the same thing! It’s not a fluke.

Now let’s add in 2022’s results. With a loss of 21% so far this year, my portfolio’s five year, one month, and one week results compound to 1490% of what I started with. That’s almost fifteen TIMES what I started with five years, a month, and a week ago. It’s up 1390%. In the same time the S&P was up about 105%.

Ask yourself, does it sound to you as if I should be scared and switch from high growth to value for faster growth? What absolute total nonsense!

Comment to me off board if you must. We’ve had enough of this nonsense discussion on the board already.



I’m wondering how you would mark your posted portfolio for a comeback from the recent downturn? Would the higher percentages reflect your thinking that staying the course in those stocks is a good bet?

I realize that you do not offer advice on what to do in the market, but nonetheless, your posts seem to point in a direction that can be beneficial to follow. Thanks for being so helpful.