Skeets, That is easy. A value investor buys stocks that are selling below some standard he sets, such as pe ratio, book value, price to sales, etc. He sells those above that level. So, the value investor ends up with a bunch of doggy looking names in his portfolio that may or may not do well in the future. He misses all new industries, as none meet his arbitrary standards.
A valuation investor buys issues that are selling below their perceived net worth based upon the input of most probable future results into a valuation system. So, a valuation investor can buy a Coherent Communications, even when it is selling at pe ratio of 40 times if he believes it is worth 60 times. A value investor would not even look at such an issue. A valuation investor can also buy puts on an IBM, even though on a pe ratio or some other basis, it may look cheap. Especially if the valuation investor thinks the e part of the pe ratio is phony. But the phoniness is a bonus. If there is no growth at IBM in the future, and there isn't, then even a below market pe ratio may not be sufficient. After all, the yield is 18% of T-Bill yields, and that is all you have left if you have no growth potential.
Valuation investors end up with a lot of value stocks, and vice versa, but the two universes have a lot of variances. For example, when is the last time you saw a biotech stock in a fund that calls itself a value fund? (The Biotech Value Fund doesn't count because it is a hedge fund and it should be named Valuation fund. <G>)
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