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Value InvestingThe pages of this section of the site relate to value investing. Depending upon how you view this approach to picking winners on the stock market, it is either a philosophy or a religion! Value investing is the art of buying assets for less than their intrinsic value. This means that whilst you may pay $1 in the market, the actual underlying value of property, cash and other assets may be $1.50 or $2. At least that is the theory. In times of high asset prices and rising markets, genuine value can be hard to find. The theory of value investing, which is sometimes also referred to as contrarian, was championed by Benjamin Graham. In his book, The Intelligent Investor, Graham covers the subject and working methods in some depth. However, Graham has long since passed away and the early versions of the book are literally decades old. Your author's copy is from the fourth revision which was carried out in 1973. For obvious reasons, there are elements of the book which seem no longer relevant. The advance of computing power makes stock analysis far more accessable to the masses than in Graham's time. Financial legislation has also moved on meaning that an investor should be less in fear of a management team that 'cooks the books', though modern investors may utter the words 'Enron', 'Bre-X' or 'Hollinger' in response. The following pages will take a brief tour of the analysis and thinking required to become successful at value investing...
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