The style of investing has become a matter of great interest in the last few decades as managers of growth portfolios, who prefer to buy stocks of companies with rapidly rising earnings, play a financial tug-of-war with managers of value funds that are invested in stocks that they believe are priced too low for their book value or other measures of worth. The issue comes down to, in looking at stocks' ratio of Price to Earnings per Share (P/E), is it the P on which an investor should bet, or the E? The P school investors are seekers after bargain prices while the E school investors worry less about price than rate of growth of earnings.
Value management, the P school, has historically outperformed growth management, though in 1999 and 2000, growth management and bets on tech stocks trounced value portfolios. We know in retrospect that the 1990-2000 episode of fascination with growth stocks was a bubble, that it was unsustainable, and that few companies ever grow fast enough on a sufficiently consistent basis to justify P/E ratios over 35.
There are compromise schools of investing, such as growth at a reasonable price, GARP for short. GARP tries to take the best of both the cautious methods of value investors who work hard not to overpay for stocks and the aggressiveness of growth investors who want to ensure they don't miss out on rapidly growing companies.