Value Investing Notes
Value investing defined by Benjamin Graham. He had written two great books as Security Analysis and intelligent Investor. Benjamin Graham (May 8, 1894 – September 21, 1976) was an influential economist and professional investor. Graham is considered the first proponent of Value Investing. Well known disciples (students and teaching assistants) of Graham include Warren Buffett, William J. Ruane, Irving Kahn, Walter J. Schloss, and Charles Brandes. Buffett, who credits Graham as grounding him with a sound intellectual investment framework, described him as the second most influential person in his life after his own father. In fact, Graham had such an overwhelming influence on his students that two of them, Buffett and Kahn, named their sons, Howard Graham Buffett and Thomas Graham Kahn, after him.( By Wikipedia)
1. Value Investors don't believe efficiency Market hypothesis (EMH)
2. Efficiency Market Hypothesis means that as anything that may affect prices that is unknowable in the present and thus appears randomly in the future
3. Value Investors don't predicated any stock price 4. They are looking for a good performance company based on past performance and current information
5. They always evaluate company financial report to find a good company.
6. They find a stock value not a stock price
7. They don't need watch stock price day by day.
8. They find a Intrinsic value of a company. Intrinsic value means that the present value of cash that an assets generated from the business
9. They find under value of a stocks
10. They evaluate company's balance sheet, Income statements and cash flow statement, looking for signs of hidden value.
11. They like a stocks with a low Price to Earning Ratio.
12. In fact, value investors need spend a more time to evaluate a stock to find a intrinsic value or fair value
13. And they need a stock price sufficient margin of safely. They find a underground stock price
14. They hold a good stocks or company over a long period until some good conditions changed.
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