Today, I want to talk about the two types of value investing and the differences between the two. In my mind, there are two types of investments, asset based or franchise (Bruce Greenwald's Value Investing book mentions three: asset, earnings power, and franchise. I think the line between earnings based and asset based is too thin to distinguish between the two).
Quite honestly, the two types of investing have been written up by others before me, and the others have done a much better job. However, I’ve never seen anyone offer ways to tell which type of investing is best for you and give ways to develop as whichever type of investor you are, so I wanted to contribute that (see the end of the post for ways to tell and suggestions for improvement). I also thought it was important to write up here because I wanted to clarify the difference between the two for future write ups. Continue reading »
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