Why should I care about growth rather than earnings though?
The more I focus on growth the more I'm gambling on unknown future earnings. Sure I might miss out on NVDA, but whether I'm better off missing out on it depends entirely on how that company ends up doing over my time horizon.
Focusing on earnings is more predictable. That doesn't mean its better and it isn't to say that today's earnings directly predict tomorrows earnings, but it is much more tangible today and is less risky as an investment compared to focusing primarily on growth.
Edit: when considering growth rather than earnings, how do you distinguish the investment from a ponzi scheme? When I ignore earnings and focus on growth, or hype etc, I can't help but feel like I'm just trying to ride the wave and sell to the next schmuck before it fizzles out. With earnings, and ideally with dividends, I can at least point to a reason the company may be worth that value other than point at what others want to pay for it.
Because you will be missing out on return. Less risk and less reward. Ideally you would not be buying NVDA but instead an index. By focusing on dividend stocks you are taking less risk so less reward over the long term. Totally up to you and kind of the same situation when people pay off a mortgage early even with an extremely low interest rate.
This isn't a small point... If you are involved in the equity market and miss out on names like this, you're almost certainly going to massively underperform. The vast majority of returns comes from a small slice of names. And again, if you want to properly do value investing, you have to precisely understand the growth component of value, as well as the weird debt and cap stack situations that usually come with value names (the market is efficient and they trade at discounts for a reason).
I trade full time, and my personal long term account has no stock picking. Value or otherwise. The medium term acct does, but not the decade+ timeframe one does not. So ultimately I don't really know what to tell you. Picking the next NVDA is practically impossible, yet missing out on such a name destroys your relative returns against an impossibly simply approach (index investing). Therefore don't try. Simple conclusion.
If you are strictly focused on a very limited view of "value" such as free cashflow, asset value, and PE (which ignores important aspects like debt maturities, industry cyclicality, quality of internal compounding, etc), then you're frankly directly competing with private equity. The names that stand out on these terms get bought by private equity, and the scraps of "value" are left on public markets. PE has 500,000,000,000 in dry powder currently, and much more efficient access to Capital markets than you do, with the ability to lever up those easy "value" tilted cash flows many times and immediately sell the debt on to pension funds and such. Trust me, if the value opportunity was truly there, they would take it. What you're seeing on markets is fairly priced on a risk adjusted basis.
Just use an up to date factor overlay on top of efficient equity beta exposure if you want diversified value that won't pigeon hole you in weird value traps. Frankly. Figuring that out is going to be much easier than cracking the value investing code and somehow beating the index. I remember an interview from one of the smarter firm owners that I've heard and he uses "short junk" (which generates extra cash to deploy efficiently) to slightly lever up his equity portfolio while giving him a broad based value tilt (it's long short portfolios all the way down). Over a long time frame something like that is going to crush any form of stock picking for the vast majority of participants.
The more I focus on growth the more I'm gambling on unknown future earnings. Sure I might miss out on NVDA, but whether I'm better off missing out on it depends entirely on how that company ends up doing over my time horizon.
Focusing on earnings is more predictable. That doesn't mean its better and it isn't to say that today's earnings directly predict tomorrows earnings, but it is much more tangible today and is less risky as an investment compared to focusing primarily on growth.
Edit: when considering growth rather than earnings, how do you distinguish the investment from a ponzi scheme? When I ignore earnings and focus on growth, or hype etc, I can't help but feel like I'm just trying to ride the wave and sell to the next schmuck before it fizzles out. With earnings, and ideally with dividends, I can at least point to a reason the company may be worth that value other than point at what others want to pay for it.