Which Is Better, Value or Growth Investing?

Each year, members of the Mont Pelerin Society, all of whom are political and economic experts, come together from around the world. I’ve been attending the group’s meetings since I was invited by Milton Friedman in 1988 — 30 years ago. That gathering was in Tokyo, and I’ve been a member since 2002. This year’s gathering was in the Canary’s Islands

The morning breakfast panel at this year’s event featured a discussion on value investing and the Austrian theory of the business cycle. During this panel, I made two central points:

First, value investing — buying stocks that are undervalued compared to other stocks — is a good long-term strategy, but one that requires patience. Often, the price of an undervalued stock can go lower before it goes higher.

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