What is Value Investing
Acquiring more than you are paying for
Whether we are talking about Socks or Stocks, I like buying quality products when they are on sale.
This is Value Investing in a nutshell. This approach is aimed at taking advantage of the irrational behavior of the people in the market. Humans act out of emotions, be it fear, greed or panic. Value investing seeks to benefit out of this human flaw by -
Buying during times of Panic
Selling during times of Mania
If you buy a house worth 20 Lacs for 10 Lacs, you can be sure that in the long run, you will earn a nice profit. Value investing is the quest of finding such under-valued stocks.