Key Principals of Value Investing

1. Intrinsic Value Assessment – Determining the true worth of an asset based on fundamental analysis rather than short-term market fluctuations.

2. Margin of Safety – Investing in assets that are significantly undervalued to reduce risk and increase potential returns.

3. Long-Term Perspective – Holding investments for extended periods to allow value realization and compounding growth.

4. Contrarian Approach – Buying when others are fearful and selling when others are overly optimistic.

5. Financial Health Analysis – Evaluating a company’s financial strength, profitability, and growth prospects before investing.

Leading Benefits of Value Investing

• High Return Potential: Value investing seeks undervalued stocks that can appreciate significantly. Buying them at a discount allows investors to gain when the market corrects its mispricing.

• Lower Risk: Value investors target financially stable companies with strong fundamentals, reducing the risk of loss as these firms are better equipped to handle economic downturns.

• Margin of Safety: This strategy involves purchasing stocks below their intrinsic value, providing a safety net against market fluctuations and company-specific risks due to the discount price.

• Long-Term Focus: Value investing typically requires a longer investment horizon, enabling investors to withstand short-term volatility and benefit from compounding returns as the market adjusts to recognize strong companies.