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<p>[QUOTE=&quot;medoraman, post: 1282920, member: 26302&quot;]Just to clarify, &quot;Value investing&quot; is buying poor performing stocks cheap. There is no indication necessarily they are &quot;growing&quot;. Maybe you are thinking of growth stocks. For growth stocks they have a high multiple, but the expectation is they will grow quickly and be worth the high multiple. Value stocks are slow or non-growing companies that the market likes to ignore, so you can buy them at low multiples.</p><p><br /></p><p>Both can be losers of course, but I prefer value stocks as there is inherently less risk, in my opinion, than growth stocks. Growth stocks, if they miss a quarterly profit expectation, can fall quickly. Value stocks usually do not react much to earnings announcements, since not much is expected of them.</p><p><br /></p><p>Like Cloud mentioned, looking at financial risk, levels of debt, free cash flow, all can minimize some of these risks. I also like to look at opacity. If I cannot understand their business model, and how they make money, I pass. An opaque business model leads to many problems, like Enron, etc.[/QUOTE]</p><p><br /></p>

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