The problem with growth stocks …

No idea whether the body of research supports the conclusion, but the article caught my attention …

* * * * *

The history of the stock market is not kind to investors who chase growth stocks.

Over the long haul, study after study has shown that so-called growth stocks tend, on average, to fare poorly. For each winning stock, there are many costly losers.

Indeed, some analyses argue that investors have typically done better investing in the beaten-down stocks that everyone hates than they have in the glamorous ones everyone loves.

That’s because unloved stocks tend to be so cheap, and expectations so low, that positive surprises can come quite easily.

With go-go glamour stocks, the reverse is true. Even a single disappointment can get punished severely.

WSJ, Is This the Peak for Netflix?, Dec. 24, 2010

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s