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Value Investing Explained
- Value investing is about quantifying intrinsic worth based on cash flow.
- Buy when the market price is significantly below this intrinsic value.
Evolution of Value Investing
- Benjamin Graham, a value investing proponent, popularized a low-valuation style.
- Warren Buffett, Graham's protege, later broadened the value definition to include 'great businesses at fair prices'.
Value Traps and Tech
- The strict focus on low valuations by some value investors often excludes technology stocks.
- This narrow approach can lead to "value traps" – seemingly cheap investments with hidden flaws.