The reason why I prefer the type of investing that is conventionally called “growth at a reasonable price” investing is because the ride is enjoyable and time is your friend. If you own a huge block of Nike stock, it doesn’t really matter that the stock has fallen from the $65+ range to the low $50+ range over the past eighteen months because the earnings keep growing at a 12-16% annual rate so it is a near inevitability that the price of the stock will be much higher five, ten, and fifteen years from now.
The favorable advantages of doing absolutely nothing but sitting back and letting the things you own compound were expressed by Warren Buffett in the 2010 letter to shareholders of Berkshire Hathaway:
“Other companies we hold are likely to increase their dividends as well. Coca-Cola paid us $88 million in 1995, the year after we finished … Read the rest of this article!