Value Investment
Value Investment is the idea that we can invest in stock based on our assessment of the underlying value of the business.
Generally speaking, most people will amass a fortune in business by astute and rational decision making, or by diligently working in their chosen career and saving. When it comes to what to do with these savings or this amassed fortune, much confusion arises.
Over the years we have met some very diligent and focused businessmen and professionals who will spend days and days researching the kind of car, refrigerator or printer to buy. When asked how they chose to invest their life savings, they share the latest tip they received from their uncle who heard from their friend that this stock is going up and that it is thus worth buying. They spend hours deciding on how to spend money on consumer durables and seconds on how to dangerously speculate with their savings. This is called speculation for a reason, as it is certainly not investment in the way that we have been taught.