What Is Value Investing?Summary: Value investing is widely regarded as the most successful investment approach. In large part, this relates to the long track-record that is available for scrutiny by some of the best minds in investment history. Whether it is for you or not, it is worth gaining an understanding in the logic and methods. The 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.
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.
But that could be a mistake to presume that it is all out of date. Ultimately, this is a mindset of waiting, pouncing and then waiting some more. It is a very professional approach suitable fof strong charachters and contrarian minds. 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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