Why Buffett Sometimes Buys Growth
Discover the key differences between Buffett’s value investing discipline and high-growth strategies that chase the next big winner.
1. The Value Investor’s Mindset
Value investing, the philosophy Buffett built his fortune on, is about buying good companies for less than they are worth and letting time do the compounding. It is not glamorous. Sometimes you will hold a stock for years before the market notices its true worth.
Buffett doesn’t just hunt for cheap stocks; he looks for businesses with predictable cash flows, competitive moats, and managers who think like owners. Coca-Cola in the late 1980s and Apple in the 2010s were not the cheapest stocks, but they had staying power.
2. The Growth Investor’s Bet
Growth investing flips the script. Here, you willingly pay a premium today for the chance of outsized returns tomorrow. Buying a stock at 40–50 times earnings might sound crazy — unless you believe earnings could triple in a few years.
This is the strategy that turned early Amazon, Tesla, and NVIDIA believers into market legends. But the risk is obvious: if growth slows or the story changes, you are left holding an expensive disappointment.
3. The Blurry Line Between Value and Growth
While these camps often sound like opposites, reality is messier. Buffett himself has embraced growth when it made sense — Apple being the clearest case. Likewise, many growth-focused investors now check valuations before committing, blending the best of both worlds.
In truth, investing styles are more of a spectrum than a binary choice. Most portfolios mix elements of both, whether intentionally or not.
4. Which Path Should You Choose?
If value appeals to you, be ready for patience-testing stretches where nothing seems to happen — until it does. If growth excites you, prepare for the occasional gut-punch when high expectations collapse.
Neither path is guaranteed. The key is choosing the approach you can stick with when markets get rough. As Buffett likes to say, “The best strategy is the one you don’t abandon.”