Welcome
Dear Value Investor,
First off, I’d like to say: Welcome.
You’re likely here because you’re an enterprising individual who has learned the term “value investing” and via Google you are searching to learn more. Congratulations. You’re taking the first steps on the road to becoming an accomplished value investor: becoming educated in value investing. I emphasize the word “investor” and “investing” because it is important to understand that what we do is not speculation. Investing is buying partial ownership in a company that, based on our research and understanding of the underlying business & industry, protects our initial investment while returning a reasonable profit over time.
No secret money making investment schemes are being sold or given away on this site. Value investing is not a secret. In fact, it’s been professed widely & loudly since the 1930’s by Benjamin Graham and David Dodd, two celebrated investment scholars from Columbia University. Their most famous protegé, Warren Buffett, arguably the best known investor on the planet, is constantly promoting intrinsic value and buying under-priced high-value securities. Yet still value investing is not popular. Mr. Buffett is even so bold and open as to publish his yearly Berkshire Hathaway shareholder letters free for anyone to read. In each letter he explains in detail his strategy, thinking and past or current investments. If the most well known and successful investor having touted the rewards of value investing over a span of decades hasn’t changed its popularity, likely nothing will.
Value investing’s popularity is questionable, but not its profitability. My explanation of this unusual combination is that value investing is not an easy act to follow. Factors working against your success include:
If you look closely at the above list you may notice that the items are not physical barriers such as money or specialized trading software, but rather psychological obstacles. Investing in value is not just about the techniques of recognizing and pricing intrinsic value, it’s about changing your mindset towards investing. The above obstacles will constantly gnaw at your resolve to invest intelligently. But if you can overcome these hurdles, you’ll succeed and profit while the rest of the market maintains its mediocrity.
Believing in value investing is instantaneous and easy, its principles make sense or they don’t. But becoming an effective value investor is a process. You need to learn how to value a business with techniques found on Stock-Value.com and through books on value investing. You also need to recognize value investments amongst a sea of overpriced speculations. This may all seem overwhelming, but take it one step at a time. Gradually build up your knowledge. Refine your stock sifting and evaluation techniques. Strengthen your emotional fortitude. The results will follow.
Let’s get started by learning more about each of the value investing hurdles above.
After that we’ll explore ways to narrow down the market to find value stocks.
I have little to fear nor lose by sharing with you this accumulated knowledge and competitive advantage, because our size and impact is outweighed a thousand-fold by the masses of speculators churning the stock markets day in and day out. It’s simply a matter of magnitude. Value investing is insignificant on the market landscape. Even Warren Buffett and nearly 80 years of value investing knowledge hasn’t changed value investing’s favor. And if you become an active participant in this site, I will stand to learn from you as well. Multiple viewpoints, will only enhance my perspective and keep my presumptions and biases in check. So, please, by all means, participate in this discussion and we will profit together.
Ben Lam
Author/Editor, Stock-Value.com
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