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Strategy

Value Investing

Buy companies below their intrinsic value.

Long-termActiveBenjamin Graham, Warren Buffett

Core idea

Value investing looks for stocks trading below what the underlying business is fundamentally worth. It rests on the idea that prices fluctuate short-term but tend to converge on intrinsic value over the long run. The focus is on solid balance sheets, stable earnings, understandable business models, and a margin of safety between price and estimated value.

How it works

You analyze metrics like P/E, P/B, debt levels and free cash flow, estimate a fair value, and buy only when the price is meaningfully below it. Positions are typically held for many years.

Pros

  • Focus on fundamental quality instead of sentiment
  • Margin of safety cushions valuation risk
  • Long, well-documented track record

Cons

  • Requires fundamental analysis and patience
  • Undervalued stocks can stay undervalued for a long time
  • Value traps: cheap on paper, structurally weak
Known for
Benjamin Graham, Warren Buffett

For educational and informational purposes — not investment advice, not a recommendation to follow this strategy.