growth investor do well in : A slowing economy B recovery C expansion economy
B
C
Outperform value or? If you are talking outperform value according to the book the answer is actually A. As value companies will lag into recession, becoming unprofitable again, consistent growth will outperform.
Agree with Paraguay. Growth is scarce in a downturn, so investors drive up the prices on these rare gems. However, in a downturn, stocks in general don’t do well, so it depends on the context.
A
I guess I was thinking more generally…in a recovery seems more likely that EPS announcements will beat market expectations, which would be good for growth investors.
abushey31 Wrote: ------------------------------------------------------- > I guess I was thinking more generally…in a > recovery seems more likely that EPS announcements > will beat market expectations, which would be good > for growth investors. Question is ambiguous.
answer is A During an ecnomic expansion, earnings growth is abundant—even in the depressed stocks preferred by a value investor—which may cause this premium to above-average growth to shrink or vanish. By contrast, when companies with positive earnings momentum become scarce, as in a slowing economy, earnings growth becomes a scarce resource commanding a higher price, and growth investors may do relatively well