The difference between growth stocks and value stocks is that value stocks have a proven value RIGHT NOW and a growth stock is a promise: that they might have value in the future.

By "value" I mean proven income and assets.

For example, let's say that a company has cash and other hard assets worth $1 billion and their outstanding issuance of common stock is 500,000 trading at $1 each. Well, that's value; you could double your money by buying the company and liquidating it and yes those kinds of deals do happen. That's a value stock.

Let's take another example. A company with a capitalization of $500 million and has stock costing $1 per share and is paying dividends of $0.20 per year and is generating $250 million in profits every year. That's pretty serious value.

Now let's take by comparison a growth stock. They have no income, no assets, tons of debt and just a good idea. If you are buying their stock, you are betting that their idea will turn into value in the future.

The difference between growth stocks and value stocks is that value stocks have a proven value RIGHT NOW and a growth stock is a promise: that they might have value in the future.

By "value" I mean proven income and assets.

For example, let's say that a company has cash and other hard assets worth $1 billion and their outstanding issuance of common stock is 500,000 trading at $1 each. Well, that's value; you could double your money by buying the company and liquidating it and yes those kinds of deals do happen. That's a value stock.

Let's take another example. A company with a capitalization of $500 million and has stock costing $1 per share and is paying dividends of $0.20 per share and is generating $250 million in profits every year. That's pretty serious value.

Now let's take by comparison a growth stock. They have no income, no assets, tons of debt and just a good idea. If you are buying their stock, you are betting that their idea will turn into value in the future.