By Jon Quast
Publication Date: 2025-12-21 03:00:00
One of the world’s greatest investors would never leave growth out of his value calculus.
In his 1992 letter to Berkshire Hathaway shareholders, Warren Buffett, a renowned investor, said, “We think the very term ‘value investing’ is redundant.” In other words, seeking value is the only way to invest. Given Buffett’s affinity for value investing and his incredible success over the years, many investors seek to emulate his approach to stocks.
Unfortunately, most value investors miss the forest for the trees. And I’ll explain how by using Nvidia (NVDA +3.80%) — the best-performing large-cap stock of the past decade — as an example.
Image source: Getty Images.
Yes, I know it’s a cherry-picked example. But many value investors would have never invested in Nvidia because they think about value in the wrong way. It’s important to recognize the misconception that holds investors back from life-changing opportunities.
Why value investors missed Nvidia
Value investing aims to buy cheap stocks. And cheapness is measured by comparing the value of the company with something from its financial results, including profits.
Today’s Change
(3.80%) $6.62
Current Price
$180.76
Key Data Points
Market Cap
$4.4T
Day’s Range
$176.44 – $181.06
52wk Range
$86.62 – $212.19
Volume
7.4M
Avg Vol
193M
Gross Margin
70.05%
Dividend Yield
0.02%
Let’s say a company is valued at $50 billion and only has $50 million in net income. This stock would be valued at 1,000 times its earnings. In other words, its price-to-earnings…
