| Growth Investing | Value Investing | |
| Ratios | ||
| Growth Rate | 5 – 10% | – |
| Price Earnings Growth | – | < 1% |
| Return on Equity | High | – |
| Price/ Book | Low | Price ≈ Book Value |
| Price/ Equity | High | Low |
| Dividends / Equity | – | Debt ≈ Equity |
| Dividends | High | Consistent Payouts |
Operating Performance
1. Low R&D expense, depreciation and interest expense
2. Net Income/ Revenue ≈ 10- 20%
3. Healthy cash level
4. Increasing retained earnings
Qualitative Factors
1. Durable competitive advantage.
If there is no comparative advantage, then choose firms with government intervention that favors the incumbents
2. Geographical diversification
3. Easy to understand business models
READ: Stock Picking Strategy – CANSLIM
When to SELL
1. Loss of Competitive advantage
2. Price/ Earnings per share > 40