Value Investing

Value Investing

What is Value Investing

Value investing is an investment strategy where stocks are selected that trade for less than their intrinsic values. Value investors actively seek stocks they believe the market has undervalued. Investors who use this strategy believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with a company’s long-term fundamentals, giving an opportunity to profit when the price is deflated. (Source: Investopedia.com)

 

The Tenets of Value Investing

  • Buy Companies, not Stocks – (See yourself as a part owner of the company you invest in)
  • Do your homework…Always
  • Invest with a Margin of Safety – Buy below underlying value (intrinsic value)
  • Buy and Hold – Don’t expect returns in a week or a month, look three to five years out.
  • Go against the consensus. – If everybody is going right, go left or do nothing.
  • Buy companies with a durable competitive advantage, a moat.

My Seven Pillars for Value Investing

  1. Price
  2. Profitability and Profit – ability
  3. Psychology
  4. Performance
  5. People
  6. Practicality
  7. Patience

You can read my full article on The Seven Pillars for Successful Value Investing Here.

 

Some Leaders in Value Investing – You might have heard of some of them.

  • John Templeton
  • Benjamin Graham
  • Warren Buffet
  • Peter Lynch
  • Bill Miller
  • Charlie Munger
  • Mohnish Pabrai
  • Phillip Town
  • Guy Spier
  • Joel Greenblatt
  • Jack Dorsey

My Favourite Books on Value Investing

  1. The Education of A Value Investors
  2. The Dhandho Investors
  3. The Intelligent Investor
  4. Security Analysis
  5. Stocks for the Long Run
  6. Rule #1 Investing
  7. Security Analysis

Alternatives to Value Investing

  • Day Trading
  • Indexing
  • Silver Stacking
  • Real Estate