Is it time for a change in investment style? The general rise in stockmarkets this year may be disguising a fundamental shift within the market. "Value" stocks, in Europe at least, are starting to outperform those in the "growth" category after five years in which the trend has been the other way round (see chart). The distinction between the two classifications is not cut and dried. "Market commentators and investment managers who glibly refer to growth and value styles as contrasting approaches to investment are displaying their ignorance, not their sophistication," is the warning of Warren Buffett. The noted American investor looks for a hybrid: companies that can grow their future earnings but are priced cheaply relative to what he dubs their "intrinsic value".
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