“The LWM strategy is a very intuitively intelligent approach to stock market investing. I particularly like the emphasis on buying undervalued, tangible assets and the strength of the analysis that underpins the investment process.”
Case Study 1: Value vs. Growth Investing
A common distinction is to label an investment style either a “growth” or a “value” approach. Whilst investors often assume that investing in growth companies will yield better returns, research has shown that this is not the case. For example:
In one prominent study pitting growth against value, three financial economists compared the returns on stocks from each category between 1963 and 1990. The average returns for growth and value stocks in the US were:
| Average Returns | Growth Stocks | Value Stocks |
| Per year | 11.4% - 12.3% | 16.2% - 18.7% |
| Over a five-year period | 71.7% - 81.8% | 138.8% - 143.4% |
Over the period, value stocks outperformed growth stocks by around 5% - 6% per year.
Source: Josef Lakonishok, Andrei Shleifer, Robert Vishny, “Contrarian Investment, Extrapolation and Risk”, Journal of Finance 48 (1994): 1541-1578
We aim to consistently outperform global stock markets. Even a modest level of outperformance, compounded over a number of years, makes a tremendous difference to the value of an investor’s portfolio.