Masters in Business At the Money: Stock Picking vs. Value Investing
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Feb 7, 2024 Jeremy Schwartz, Global Chief Investment Officer of WisdomTree, discusses the importance of value investing and long-term performance, Warren Buffett's investment strategy, the challenges and sustainability of growth investments, and the advantages of value investing for long-term returns.
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Value Investing Definition
- Value investing focuses on price relative to fundamental metrics like dividends and earnings.
- These metrics are key anchors for valuation, reflecting future cash flows.
Siegel's Shift to Value
- Jeremy Siegel shifted from a buy-and-hold strategy during the tech bubble due to overvaluation.
- He advocated for value investing and highlighted dividends and earnings as crucial factors.
IBM vs. Exxon
- IBM had higher growth metrics than Exxon over 70 years, but Exxon delivered better returns due to its lower valuation and higher dividend yield.
- This illustrates the market's tendency to overvalue growth and undervalue cheaper segments.