In a wide-ranging interview, value investing guru and Columbia Professor Bruce Greenwald recently talked with the Motley Fool about a variety of issues, including the current state of the market and how he values stocks. Greenwald explains why the shifting of the economy toward more service-oriented, locally focused businesses means profit margins may well remain above historic norms. He also talks about the difference in evaluating growth and value stocks. “In the non-growth stocks, which are the non-franchised stocks, it’s always been the case that traditional valuation metrics apply, and they continue to apply,” he says, referring to metrics like the price/earnings and price/book ratios. “In the growth stocks, on the other hand, I think we now have learned, to our cost — and by the way, not just in this crisis but in the sell-off for the tech bust in ’99-2000 — that you cannot put a sensible value on things. If you can’t put a sensible value on things, the question is how do you decide if they’re worth buying? The answer is, you can put a sensible return on things.” By that he means looking largely at dividends and share buybacks. Finally, Greenwald also talks about reputational risk of companies, and how that can be an investor’s friend.