Hi, straight into it.

What is value investing?

How can you find value in the stock market?

What gives you the best chance at attaining strong investment returns when investing for value?

Simply put, value investing is investing your cash into an asset which will produce more cash in the future than the price of the asset assumes the value is. Finding value is something which you have to practice and it comes with practice and confidence, you have to believe that you can pick winning stocks before you actually go and do it. Self esteem is the bedrock of success in investing and beating the market.

Value can be found in multiple ways in the stock market, the most common way of understanding value is by looking at the cash that the business will produce in the future and to discount it back to the present rate. If the value of the asset exceeds the price, the asset is a value investment. The amount by which it exceeds is the margin of safety, the greater the gap between the price and the value of the asset- the safer your money is in the asset.

Value investing is all intelligent investing- Charlie Munger

Finding value can also be found through growth and predictions in terms of asset and earnings growth. You can find value by predicting the value by which the earnings are growing for example. Understanding what the company is doing is the key to attaining success in the stock market, it is understanding the businesses actions which differentiate an average investor from a successful one.

To attain success in the stock market, you need to have patience for the value of the asset to allow for price in the stock to catch up. You should not be in stocks, if you can not hold the asset for a minimum of 10 years, once you have found a value investment- it takes time for the value of the asset to catch up to the price, it does not happen quickly. The market corrects itself over the long term.

Do not invest if you are going to do something silly, like sell the stock due to short term market fluctuations.

What are short term market fluctuations?

Fluctuations in price from anywhere between the time of purchase to 10 years, you have to have a long term mindset when it comes to creating wealth in the stock market. The winners are those who are patient.

The most successful investors are those that keep on learning, the more you learn- the more you will be able to make. Value investing comes in many forms and understanding that you need to become a learning machine in order to attain success in the stock market is the key to generating and sustaining long term wealth creation in the stock market.

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Thank you for reading,