There are at least two types of value stocks: (1) stocks whose probable growth makes them intelligent investments and (2) stocks which, even under conditions of stagnation, sell at valuations enabling the investor to earn a strong return. In the former type, which is typically called GARP or "growth at reasonable prices," the company just keeps on giving year after year. In the latter type, the value disparity is somewhat of a one-off opportunity. This is similar to the "good business versus cigar-butt" or the "patient value versus courageous value" dichotomy.
In the former case, you conservatively assume some growth because the intrinsic value is growing year by year. In cases where the fair value is pretty constant, you buy,...
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