Client login

Vinaora Nivo Slider 3.xVinaora Nivo Slider 3.xVinaora Nivo Slider 3.xVinaora Nivo Slider 3.xVinaora Nivo Slider 3.xVinaora Nivo Slider 3.x

Value investing is a term first coined by Professors Benjamin Graham (the father of value investing) and David Dodd while teaching at Columbia Business School in 1928.

Value Investing simply means buying an asset for significantly less than what its true worth should be. When one buys an asset at a discount to what an informed buyer (insider) would pay, the risk of being wrong in the valuation (which is always subjective and prone to error), is reduced. That is what Ben Graham meant by “margin of safety”.

The tricky part is less on getting the valuation right but on getting the business part right. A stock could be cheap for a reason. Investment success is only achieved when identifying a good business with good prospects that for some reason trades at a discounted price. Otherwise one could be buying into a “value trap”.

“Price” is like the tip of an iceberg – you can see it, but you have no idea how big or small the iceberg is below the surface unless you put analysis to it.  As Ben Graham has observed: “price is what you pay, value is what you get”, meaning that big swings in the market don’t necessarily mean big swings in value. When you buy a stock, you are buying ownership of a business with real assets. Should that really change just because the market is moody or plagued by worries about liquidity? A climate of fear is your friend when investing; an euphoric world is not.

Investing, when done properly is based upon patience. Most generally value investing implies having a variant view to the market consensus. In our view, patience is an essential requirement to all successful investing.