A Quote by David Dreman
One of the big problems with growth investing is that we can't estimate earnings very well. I really want to buy growth at value prices. I always look at trailing earnings when I judge stocks.
Related Quotes
Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced.
Generally, variations in earnings aren't nearly as impactful on glamour growth stocks as are changes in image and, well, sexiness. I often think of glamour stocks as though they are attractive women dressing to the nines.
Reasonable mergers generate substantial synergies, so that provides for earnings and cash-flow growth even if it doesn't provide for revenue growth, and I think that's a big driver.
A young financial writer once brought ridicule upon himself by stating that a certain company had nothing to commend it except excellent earnings. Well, there are companies whose earnings are excellent but whose stocks I would never recommend. In selecting investments, I attach prime importance to the men behind them. I'd rather buy brains and character than earnings. Earnings can be good one year and poor the next. But if you put your money into securities run by men combining conspicuous brains and unimpeachable character, the likelihood is that the financial results will prove satisfactory.
I buy stocks when they are battered. I am strict with my discipline. I always buy stocks with low price-earnings ratios, low price-to-book value ratios and higher-than-average yield. Academic studies have shown that a strategy of buying out-of-favor stocks with low P/E, price-to-book and price-to-cash flow ratios outperforms the market pretty consistently over long periods of time.
Stock prices are likely to be among the prices that are relatively vulnerable to purely social movements because there is no accepted theory by which to understand the worth of stocks....investors have no model or at best a very incomplete model of behavior of prices, dividend, or earnings, of speculative assets.
For the most part, earnings and market value growth are a result of reduced expenses.
When high-growth companies slow down, growth and momentum junkies often sell indiscriminately, which can create great opportunities for value investors. Just be careful not to anchor on the stock's previous price or earnings multiple, which are no longer relevant.
Most look at earnings and earnings potential, well I can't get into that game.
Of course, the discounting of future earnings should hurt all stocks. But it should hurt technology stocks more than others, because so many of them are valued at extremely high levels relative to their current earnings.
Successful investing is about owning businesses and reaping the huge rewards provided by the dividends and earnings growth of our nation's - and, for that matter, the world's - corporations.
Brand-name growth stocks ordinarily command the highest p/e ratios. Rising prices beget attention, and vice versa - but only to a point. Eventually their growth rate can diminish as results revert towards normal. Maybe not in all cases, but often enough to make a long-term bet. Bottom line: I wouldn't want to get caught in a rush for the exit, much less get left behind. Only when big growth stocks fall into the dumper from time to time am I inclined to pick them up - and even then, only in moderation.
Stock prices relative to company assets are no better at signaling the likelihood of future earnings growth than they were the day the Titanic sank, and risk management is a good deal worse.
Employers should overcome a myopic quarterly earnings posture and focus on long-term strategies for growth that include investing in their own skills-training efforts to enable a broader pool of applicants.
Both cheap value stocks and more glamorous growth stocks can work well in a portfolio - if done right.
Abbott Labs absolutely are on the mend. You were able to buy 15 percent growth over the last five, 10 and 20 years at 13 or 14 times earnings, ... It's a great opportunity. Buy on this dip. We think a year from now the chart's going to be a mirror image on the up side.
Related Authors
Irving Kahn Quotes
American
Investor
Ted Leonsis Quotes
American
Investor
Walter Schloss Quotes
American
Investor
Warren Hellman Quotes
American
Investor