Value investing is often romanticized as courageous contrarianism: buying when everyone else is fearful. In reality, if you truly need “courage” to click the buy button, it may be a sign that you do not understand the business well enough. Acting bravely in the face of ignorance is not value investing; it is speculation with…
Market prices move every second, but the underlying business usually changes slowly. Value investing is about focusing on that slower, deeper layer: how the company actually makes money, how durable those earnings are, and what that stream of cash is worth. Market volatility often has little to do with changes in true business value, especially…
Long-term investing and value investing are related, but they are not the same thing. Long-term investing is simply about holding assets for many years, while value investing is a specific way of choosing which businesses to hold for the long term. A long horizon by itself does not make an investment safe. If you overpay for a…
When you buy a stock, you’re not buying headlines or hype — you’re buying the right to share in a company’s future cash flows. Every business’s value ultimately comes down to the money it will earn for its owners over time, discounted back to today’s value. That’s what we mean by “intrinsic value.” Imagine owning…