Value

Value investing was made famous by Warren Buffett, but its history traces back to the early 1930s when Benjamin Graham wrote the book “Security Analysis.” Value investing is the act of investing in undervalued assets. These assets are misunderstood by the market and trading at prices that are below its intrinsic value.

Value investors are considered contrarian investors because they are oftentimes trying to find assets that have been dismissed or ignored. A value investor will analyze an asset and attempt to add up the sum of its parts looking for a value that exceeds its current value on the open market. Value investors are good with numbers and understand the basics of cash flow, accounting, corporate management, and business operations.

The essence of value investing is understanding intrinsic value and knowing what a company is worth compared to where it trades on the open market. Performing rigorous research and knowing how to properly value a company are the cornerstones of value investing and it continues to be a popular strategy in the world of investing.
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