Investment Guide: How to Value Invest? What Really Works?

Value Investing is as much art as science and the investor psychology plays a great role in the success or failure of your investment strategy. The following compilation of articles and writings form a comprehensive guide to value investing for a disciplined investor. These articles introduce the reader to the fundamental concepts in value investing as well as ideas, tips and tricks on appropriate actions to take at various different situations the investor is sure to encounter during his or her investment career.

Investing in the stock market is a way to participate in the wealth creation process in the society. While it can be very rewarding, beginning investors are often confused with the various concepts and can make mistakes if they do not follow the right investment strategy. We are putting together an investment guide that explains various concepts and terms you will come across as a investor. Whether you are a beginner or an experienced investor, you will find resources that will help educate, explain and clarify.

How to Use the Investment Guide?

This guide is logically arranged starting with major concepts or ideas. As you drill down, you will be presented with related concepts that you can explore further. In addition to defining the term and illustrating with examples, we have added narrative to show how to use these concepts in practice. These might include things to be watchful for, when to and when not to do a certain thing, other ideas that may be related but not intuitively obvious, etc. This is a work in progress and over time this will fill up and will be expanded

There is no specific way to use this guide. However, we will outline 3 possibilities.

  1. Start with the top level topic and navigate to related topics as you read using the links on the page
  2. Use the search engine and add a "#!vsg" at the end of your search query (without quotes). For example, if you are searching for "stock warrants", you will write this in the search box "stock warrants #!vsg". This will take you directly to the search results on Value Stock Guide for your query
  3. You could also try the Search from the bottom of the page


Quick Start Guide

The following articles will give you a quick overview of my investment philosophy and basic concepts for a successful value investing practice. This is a great place to start and then you can chose to go further and deeper in each topic from the more extensive list that follows

Quick Start

Other Popular Articles on Investing

What Kind of Returns Can You Expect with Value Investing in Real Life?

Click Here to Download the FREE Case Studies

Consider this:

  • Since 2009, when we started, value stocks have actually UNDER PERFORMED the market
  • Easy money has made momentum investing all the rage
  • Hedge funds of all types have suffered with losses and redemptions, with seemingly another hedge fund shutting down every week

At Value Stock Guide, our members during this time have soundly beaten most market indices. You would have done better (way better) than 90% of the mutual funds, 90% of the hedge funds and even Berkshire Hathaway stock.

In fact, we have not had even 1 losing investment during this time

All secrets revealed in the FREE case studies. Download them now


Detailed Investment Guide

Explore the value investing process and concepts in greater detail with the following articles. This is a work in progress and will be expanded continuously over time.

Basic Stock Concepts

Different Investment Strategies

Personal Finance and Value Investing

  • Taking a long term view
  • Use value investing portfolio as the growth component of your overall financial picture, not as an income generating vehicle
  • Invest for posterity, not retirement

Value Investing Strategy and Process in Detail

  • What is value investing?
  • Do or Do Not... There is No Try
  • Why value investing works and historical confirmation? What happens when a stock/business is undervalued?
  • Is the market truly efficient?
  • Examples of successful value investors
  • How to value invest?
  • Fundamental analysis of stocks
  • Developing a business owner mindset
  • Using financial ratios and why popular rules of thumb are pure hogwash when buying
  • Why popular rules of thumb work when selling?
  • Choosing valuation models appropriate for the situation
  • Controlling risk – introducing margin of safety, competitive advantage (moat) and other related concepts
  • Mental models, what-if scenarios, and how to future proof your investment without making futuristic assumptions
  • Value Investing in Cyclical Stocks
  • The perfect value stock – when security valuation, business cycle and economic cycle hit the lows at the same time
  • Why dividends are a value investor's friend
  • Managing your value investment portfolio – diversification, weights, portfolio cash flow, liquidity and more
  • Investing in special situations
  • Using debt instruments for value investing
  • Why leverage should be avoided except in cases of extreme conviction?
  • Doing small things right more often gives you the edge over the market
  • Success in value investing is less about how much you know and more about how you act
  • Selected value investing resources for further reading
  • Books

Easy Way to Understand What is Value Investing

Value investing as an investment practice was popularized by Benjamin Graham and David Dodd in their 1934 classic treatise “Security Analysis”. The idea itself rests on a very simple premise: Stock prices tend to differ from the intrinsic value of the company in the short term. In the long term however, the stock price and… [Read More]