Value investing is the best and most disciplined approach to profitable stock market investing.
Value investing style is used by Value Investors.
"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." - Ben Graham
Least number of investors follow this approach to investing.
The three principles on which value investing depends are fundamentals, safety of capital and a reasonable return on investment.
It requires lot of hard work, enormous amount of time to read and learn, courage to be your own, patience and discipline to be successful.
In value investing The focus is mostly on getting something that we think for less then what is it actually worth.
The less you pay, the more are your returns.
Example:
Suppose an investor estimates that a company is worth Rs.100 per share.
So for the investor to make profit it is necessary to buy the stock of that company for less than Rs.100.
It is not important to get in at the lowest but knowing the best and worst about the company, sector in which it operates, its competitors, promoters, durability of the moat, etc..
Even if your friend or neighbour gets in early than you but will sell far ahead of you because of panic created by Mr.Market.
In cricket parlance, it is like playing Test match.
Growth is always embedded in value.
Value and growth always meet at a hip.
Value Investing is all about taking Rational decisions.
