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.