Value Investing

Principles of Value Investing:

Value investing involves identifying undervalued stocks that are trading below their intrinsic value. Investors seek to buy these stocks at a discount and hold them until their market price reflects their true value.

Identifying Undervalued Stocks:

• Fundamental Analysis: Evaluate a company’s financial health, earnings, and growth potential.
• Intrinsic Value Calculation: Estimate the true value of a stock using valuation models (e.g., discounted cash flow analysis).
• Margin of Safety: Ensure a sufficient margin between the stock’s market price and intrinsic value.

 

Famous Value Investors and Their Strategies:

• Warren Buffett: Focuses on buying high-quality companies at reasonable prices and holding them long-term.
• Benjamin Graham: Emphasized the importance of intrinsic value and margin of safety.