One of the consequences of using a volatility based position sizing strategy (we use the risk parity method) is that for highly volatile stocks, you may start out with a very small initial position. However, the level of undervaluation in the stock may call for a larger position to be eventually established. This may lead you… [Read More]
Best Value Investing Blogs, Tips and Articles
Value investing is an investment strategy popularized by Ben Graham and has proved to be a superior investment strategy over long investment horizons. We all like to buy products and services on sale - value investing just extends the concept to buying and selling stocks. It tends to simplify the investment process by eliminating confusing and generally useless concepts often part of the advanced financial and management academic programs. The success as a value investor arises from understanding the business and also by staying disciplined. Therefore, value investing is as much a financial concept as it is a change in investor behavior.
As many enterprising value investors realize after many years of "value investing" in practice, just learning the concepts and methods does not make you into a successful value investors. If this was enough, you would see a large number of very successful value investor mutual fund managers with enviable long term track record. Sadly, it is not so.
In addition to learning the methods and tools of value investing, you have to acquire a certain behavioral attributes that define a value investor. A sincere appreciation of value, a healthy rejection of whatever market sets as the price as a true reflection of value or a given asset, and the guts to stay with own analysis and research for a long period of time DESPITE an uncooperative market.
In fact, the markets are normally against you for most of the time you are invested in any undervalued asset. This created a great opportunity to acquire the asset for cheap, and you did. Wouldn't it be great if once you buy something, the market quickly moves to realized the value for you? Unfortunately, this is not how it works in reality, so you need to be able to call upon a set of behaviors and beliefs to be able to wait patiently for your profits.
At Value Stock Guide, I believe that there is enough material out there that teaches you how to calculate a certain ratio, or create a discounted cash flow model. This is not the secret to investing successfully for long periods of time. The secret to investing successfully for long periods of time is how you act and react at the edges. Do you display conviction in your ideas when the stock goes against you, or do you fold meekly? How do you build up this conviction? Isn't taking the easy way out like everyone else more comforting? Why do you invest - is it because you like the thrill of buying and selling, or is it because you patiently want to see your portfolio grow? Can you sit and watch the paint dry for days, if you know that at the end of the week there will be a substantial reward waiting for you?
I tackle many behavioral and soft side of value investing on these pages. Sometimes I also talk about the concepts. No one has ever become a good investor without building their core base of correct foundational investing attributes. You can do this here.
The articles below explain the concept of value investing, tips and tricks including articles aimed at beginner and advanced investors. Many of the concepts presented here are result of the evolution of value investing practice over time. Original value investing research and strategies are also posted here.
For additional in-depth coverage of value investment strategies and topics please view our value investing guide
The following is an excerpt from the ebook The Real Secret to Beating the Market by 6% Annually. Click here for more information and to purchase The Kelly Criterion Kelly Criterion was developed by John Kelly at Bell Labs. It has been proven to maximize the portfolio growth over time compared to any other strategy…. [Read More]
Your broker offers margin investing. You have a great idea for a stock to buy. You just have enough money to buy 100 shares, but if you use the full margin available to you in your account, supported with this stock and other stocks in your account, you can potentially buy 200 or 300 shares… [Read More]
I think a lot of us are very fixated on getting the highest price they can receive when they sell a stock. I think this is a very rational attitude to have, however to actually execute it well is a tough ask. Consider the following Once a stock reaches its fair valuation, it is hard… [Read More]
Checklist investing is a simple process with tremendous benefits. An investment checklist can protect you from yourself, and propel you towards investment success. Atul Gawande is known for writing The Checklist Manifesto – a book where he describes how checklists protect us from our cognitive biases. In 2001 a doctor working at John Hopkins Hospital,… [Read More]
Forget about value versus growth investing. There’s a lot of debate around the philosophy of value versus growth investing. Value investing is the process of investing in stocks that are undervalued relative to their intrinsic value, while growth investing refers to the philosophy of investing in companies that have consistent earnings growth as well as… [Read More]
You can make money investing in the market – if you have the right mindset. When one thinks about the characteristics that make for a good value investor, there are a few non-negotiables. Temperament is key – an investor needs to be able to divorce themselves from what everyone else is doing and insulate themselves… [Read More]
There is often this inherent conflict in a value investor‘s mind that continues to play for almost every investment he makes. If you have been investing for a while, you will read what I am writing and nod along. You know what I am speaking of. Best Value Investors Have 2 Qualities in Balance Quality… [Read More]
Value Investing Case Studies Master List Some time ago I listed a master list of case studies going back 5 years. This included 26 different investments we undertook starting 2011. This 188 page value investing case studies pdf can be accessed from here. Check out the above value investing case studies. Questions are welcome. More… [Read More]
When it comes to investing, the key for most people to make money is to avoid as much risk as possible. In order to accomplish this, it’s best that all investors decide to diversify their portfolios in all possible ways. However, while it may sound simple, diversification is anything but that. However, by following a… [Read More]