Growth investing is the philosophy of investing in a security that shows signs of above-average earnings growth as compared to its industry or the overall market, even if the security appears expensive from a price-to-earnings or price-to-book perspective.
This style of investing is also called capital growth investing since growth investors seek to maximize capital gains, not income from dividends. Companies that genereally fall under this category tend to be driven by new technologies and/or domination of a niche market.
Notable proponents of this strategy include Philip Arthur Fisher, Jim Slater, Peter Lynch and Warren Buffett, although the latter has often maintained that there is no theoretical difference between value investing and growth investing.
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