Growth stock investing these days is a far more perilous pastime than it used to be. Just ask the investors in Green Mountain Coffee Roasters, which recently reported that its fiscal fourth-quarter earnings tripled, its revenues continued to climb and its margins have widened, and that the company's managers are planning for future growth in sales of its K-cup portion packs of coffee by building new offices and production facilities. By most standards, that would make Green Mountain a growth stock to cherish, even if its peak valuations of 70 times earnings appeared frothy to critics like widely followed hedge fund investor David Einhorn.

Normally, a hedge fund manager making disparaging remarks about a company whose stock he is short causes market participants to yawn. But in this new investment landscape, characterized by a lack of conviction and tremendous volatility, Einhorn's litany of bearish comments sent Green Mountain's stock into a tailspin - it lost more than 30% in a single day in November - and offset a host of upbeat projections by Wall Street analysts such as Jon Andersen of William Blair, who upgraded the stock to outperform. Analysts, at least, seem to be convinced that there's plenty of growth ahead, with all but one maintaining some form of buy rating and the consensus price target hovering around $96 a share, compared to its price of less than $60 a share in early December.

But the face-off between Einhorn and Wall Street's buy-side captures the ongoing debate over growth. With fears of a looming global recession, there's more uncertainty about classic measures of growth and a greater willingness to believe critics like Einhorn than the audited financial statements of companies that are growing. Some veteran investors are even implicitly rejecting the idea that it's possible to buy stocks that can reliably deliver double-digit gains in revenues or profits, along with solid margins.

Consider the way Hans Olsen, head of U.S. investment strategy at Barclays Wealth, thinks about growth these days. True, he is charged with seeking out investments for the millionaires that make up the clientele of Barclays Wealth, a conservative bunch more interested in hanging on to what they have made than in seeking out ways to multiply it in a few years. Even so, Olsen's thoughts about growth investing in the 21st century are startling.

DEFINING GROWTH DOWN

"Total return is the new growth," he suggests, arguing that the more income a dividend-yielding stock generates, the less the investor has to rely on the company's ability to grow revenue and earnings and the market's willingness to acknowledge that growth by awarding the shares a premium valuation. "A low-growth economy and low-growth interest rates mean we need to redefine what growth means in the 'new normal,' " Olsen argues.

That thinking won't be welcomed by financial advisors, many of whom are working with clients whose portfolios have been battered by the events of the last decade and whose retirement hopes can't be met by returns that never break above the high single digits. Many investors are terrified - both of investing at all, and of not coming anywhere close to having enough money to retire.

The generalized market gloom has made it incredibly difficult for advisors to persuade clients to move out of cash and put assets at risk to search for scarce growth. But tough as it may be, it's not a job they can shun, says Kevin Sanderford, wealth manager at Colorado West Investments in Montrose, Colo. "If your client is 65, odds are that he still needs a rising principal balance, and that means that you need to find him some growth to add to his portfolio."

BEARS VS. GROWTH

The broad stock market, however, seems intent on reminding advisors that growth is dead. Even when companies like Green Mountain seem to deliver growth in earnings or revenues, for instance, the market might acknowledge them, but only briefly.

Presented with the company's fourth-quarter earnings statement, investors chose to focus not on the growth that Green Mountain did achieve, but on the fact that revenue fell short of analysts' expectations and on Einhorn's criticisms. Upbeat news is taken for granted; even a whiff of uncertainty is seen as a reason to dump a stock in a hurry in the prevailing environment. And that means that capturing improved corporate results in the shape of higher stock valuations is becoming increasingly difficult. In turn, that is driving more investment pros like Olsen to seek out new kinds of "growth" investments.

"The most optimistic numbers for stock market returns - the absolute best-case scenarios - are about 10% over the next five years, but that's not a number you can build an investment plan around because the chance of reaching that level is minimal," says Jason Pride, director of investment strategy at Glenmede Trust. "When I see people who have built investment plans around assumptions that they will earn 9% or 10% on stocks, that is worrying."

Pride is one of a growing number of analysts and investors flocking to high-quality, high-yield bonds, where market jitters have created great values. Similarly, Pride says bonds issued by the governments of emerging nations can also offer yields of 5% to as high as 8%.

But bonds aren't stocks, offering the potential for substantial upside if headwinds shift and turn into tailwinds. And even an 8% yield can't replace the 15% returns on stocks that many investors became accustomed to during the 1980s and 1990s. In many cases, those returns were generated by entire sectors, most notably tech stocks.

That's why, says Martin Atkin, a senior portfolio manager at Bernstein Global Wealth, "everybody is used to thinking about sectors as driving growth investing, whether that is technology, financial stocks or housing." These days, he adds, "I don't know if I could think about sectors that drive growth. Perhaps it's about themes and super cycles; perhaps it's about stock-picking."

An advisor who realizes that some kinds of growth investments will be vital if her clients are to meet their retirement goals may need to redefine what she means by "growth" and rethink her approach to growth investing. She may not, however, have to abandon the idea altogether in favor of watered-down growth strategies like dividend investing or high-yield bond investing. The trick, pros say, is to combine stock-picking prowess with an awareness of broad market themes and a sense of what kinds of growth are going to be recognized and rewarded even in a jittery market.

STOCKS FOR THE BLEAK

Lululemon Athletica, for instance, has seen its stock price nearly double from December 2010 to December 2011; even during the exceptionally bumpy month of September, the share price remained remarkably stable. The reason? Consumers appear to have an insatiable demand for $100 pairs of yoga pants for meditative workouts as some, no doubt, seek relief from the stress of an enfeebled economy and gyrating financial markets.

Lululemon's revenues are growing at a rate of 57% year-over-year; its earnings have doubled. Of course, given the paucity of growth these days, the stock isn't cheap: as of early December, investors had to pay more than 40 times trailing 12-month earnings per share.

"There is definitely growth out there," says Mark Coffelt, chief investment officer of Empiric Advisors, a financial advisory firm in Austin, Texas. But usually, it's already priced in, or in other cases, shares are overpriced and vulnerable to setbacks.

Consider the magnitude of the pummeling that Green Mountain Coffee Roasters took after a single, prominent short-seller made public some of his analysis of the company. Another case: Ancestry.com, a company that amateur genealogists turn to in order to research their roots, lost more than 10% in a single trading day last year after one team of analysts raised questions about a new pricing model, adding to fears that the company couldn't sustain its string of above-expectation earnings results.

But Coffelt prefers to look beyond these high-expectation, high-profile and high-P/E stocks when seeking growth investments for his clients. "The fastest-growing firms don't necessarily produce the best returns for clients," he says.

FUNDAMENTAL RULES

Rather than focusing on any sector, he screens a large array of stocks in search of those with low P/E ratios and high growth rates. Through the end of the summer, Coffelt says stocks with the highest inverse P/E-to-growth ratios outperformed their counterparts significantly.

"You can still get hammered in a hostile environment - some months, nothing you buy for a client will do well - but these are the stocks where you will do better when rational minds prevail." Stocks that Coffelt has identified on behalf of clients include little-known firms like BridgePoint Education, a company that allows students to take online courses but also has real schools; and Omega Protein, which sells fish that produce high levels of omega 3 to food processors like Cargill.

"We find the most growth in smaller stocks and mid-caps," Coffelt says. In fact, some of the best-performing mutual funds over the last 12 months have been those that, like Rice Hall James Small Cap Institutional fund and the Virtus Small-Cap Sustainable Growth fund, flock to similar kinds of companies. Most of the holdings of both funds are small companies that have a sustained demand for their products and few real rivals. Both, for instance, have stakes in PriceSmart, a retailing firm that has brought the concept of warehouse shopping to Latin America and has outlets in Costa Rica, Honduras and Panama, as well as many Caribbean nations. Those are markets that are big enough to fuel growth at PriceSmart, but not large enough to tempt industry giants like Costco to battle for market share.

As well as screening for inexpensive, high-earnings growth stocks and gravitating toward those like PriceSmart that have not only strong fundamentals, but also have limited competition and produce goods or services that will always be in high demand, advisors can think big. One approach is to look for stocks that might benefit from global themes that aren't likely to be threatened by a dismal global economy.

Even if consumers stop buying yoga pants or premium coffee, for instance, they will still want clean water and food, and companies that help deliver those essentials could well emerge as the 21st century's version of high-growth stocks. Sanderford, the wealth manager at Colorado West, believes Flowserve and Mueller Water Products - both of which make valves and pumps required to treat water before it can be consumed by humans - will generate above-average returns going forward.

THE NEXT GROWTH SPURT

And even if China's growth does stall and the country's citizens are forced to scale back their purchases of designer clothing and smartphones, the demand to consume more protein is likely to remain - a political issue that the Chinese government will want to ensure never comes to a boil. That means fertilizer stocks like those of Mosaic and Potash are likely to do well. Potash isn't exactly a glamorous commodity, like gold, but it's a vital one and its price has tripled since 2004.

"There is an agricultural super-cycle in place, as massive numbers of people cross a threshold where they can change their diet and consume more protein - but it takes about seven pounds of grain to produce a pound of protein in the form of a hog or something," says Bernstein's Atkin. "That puts a tremendous strain on agricultural production, and companies that help maximize that production will see superior growth."

Atkin even expects another super-cycle to buoy the share prices of more traditional growth stocks in the technology sector. This wouldn't be an across-the-board growth market as of old, he emphasizes, but one that benefits those companies involved in pushing forward the boundaries of mobile Internet technologies, such as Apple and Google.

Growth hasn't vanished, it is just taking on new shapes and forms, and requires new mind-sets and new skills to identify and capture, Atkin says. "The growth fundamentals won't always be reflected in what the market is doing, and the fundamentals aren't calling to people today," he adds. "It will require patience, but ultimately these growth investments will reveal themselves as what they are."

Suzanne McGee, a former Wall Street Journal reporter, is a New York-based freelance writer and the author of Chasing Goldman Sachs.