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Here I’m sharing 3 value investing strategies that have consistent success in finding undervalued stocks.
One is a fundamental analysis strategy from the father of value investing himself, Ben Graham. Another is a blend of fundamental analysis with a dash of momentum and trend following thrown in from a founder of an investment firm managing over $6 billion in assets.
Black Swan events are often discussed and mostly dreaded in investing circles. They seem to come from out of nowhere and lead to a stock market crash.
The Company is almost insolvent but management says everything is fine on earnings call?
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We will help you cut through the crap found on many investing sites and newsletters, so you can see for yourself whether a company is worth investing your hard-earned money in.
From the Bookshelf
Here are a few books from our collection of new and timeless books on value investing, methodology and mindset.
The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment
By Guy Spier
What happens when a young hedge fund manager spends a small fortune to have lunch with Warren Buffett? He becomes a true value investor.
This book traces the arc of a transformation. Author Guy Spier started his career as a Gordon Gekko wannabe — brash, short-sighted and entirely out for himself. Then, a series of transformations and self-realizations led him from an investment banking job with a third-rate firm to managing his own fund, which has generated tremendous returns for his investors. His journey began with the discovery of Ben Graham’s The Intelligent Investor, then took him on a path to a life-changing meeting with the renowned investor Mohnish Pabrai, followed by his famous lunch with Warren Buffett. That $650,100 meal proved to be a bargain, teaching Spier some of the most valuable lessons of his life.
Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week!
By Phil Town
In this book, self-made millionaire Phil Towns will show you how he turned $1,000 into $1 million in only five years, and then proceeded to make many millions more.
Before I became “Phil Town, teacher of investing principles to more than 500,000 people a year,” I was a lot like you: someone who viewed individual stock investing as way too hard to do successfully.
Rule #1, as famed investor Warren Buffett will tell you, is don’t lose money. Through an intriguing process that I’ll clarify in this book, not losing money results in making more money than you ever imagined. What it comes down to is buying shares of companies only when the numbers—and the intangibles—are on your side. If that sounds too good to be true, it’s because the mind-set I’ll be introducing you to leads not to bets but to certainties. Believe me, if there were anything genius-level about this, I’d still be a river guide collecting unemployment much of the year.
The Snowball: Warren Buffett and the Business of Life
By Alice Schroeder
The personally revealing and complete biography of the man known everywhere as “The Oracle of Omaha”
Here is the book recounting the life and times of one of the most respected men in the world, Warren Buffett. The legendary Omaha investor has never written a memoir, but now he has allowed one writer, Alice Schroeder, unprecedented access to explore directly with him and with those closest to him his work, opinions, struggles, triumphs, follies, and wisdom.
When Alice Schroeder met Warren Buffett she was an insurance industry analyst and a gifted writer known for her keen perception and business acumen. Her writings on finance impressed him, and as she came to know him she realized that while much had been written on the subject of his investing style, no one had moved beyond that to explore his larger philosophy, which is bound up in a complex personality and the details of his life. Out of this came his decision to cooperate with her on the book about himself that he would never write.
The Dhandho Investor: The Low-Risk Value Method to High Returns
By Mohnish Pabrai
A comprehensive value investing framework for the individual investor
In a straightforward and accessible manner, The Dhandho Investor lays out the powerful framework of value investing. Written with the intelligent individual investor in mind, this comprehensive guide distills the Dhandho capital allocation framework of the business savvy Patels from India and presents how they can be applied successfully to the stock market. The Dhandho method expands on the groundbreaking principles of value investing expounded by Benjamin Graham, Warren Buffett, and Charlie Munger.
By Robert Shiller
Nobel Prize–winning economist Robert Shiller, who warned of both the tech and housing bubbles, cautions that signs of irrational exuberance among investors have only increased since the 2008–9 financial crisis.
With high stock and bond prices and the rising cost of housing, the post-subprime boom may well turn out to be another illustration of Shiller’s influential argument that psychologically driven volatility is an inherent characteristic of all asset markets. In other words, Irrational Exuberance is as relevant as ever.
Man vs. Markets: Economics Explained (Plain and Simple)
By Paddy Hirsch
For the layperson who wouldn’t know a “bond” from an “option,” and who believes that a “future” is when we’ll all have flying cars.
Here is an illuminating, insightful, and wonderfully witty journey of discovery through the often confusing financial markets, offering clear, relatable explanations and definitions of the system’s various instruments, yet less simplistically than the popular …for Dummies series. Man Vs. Markets is a must-read handbook for everyday investors, serious students of finance and economics, and everyone who wants to understand what they’re reading when they open their newspapers to the business section.
Principles: Life and Work
By Ray Dalio
In Principles, Dalio shares what he’s learned over the course of his remarkable career. He argues that life, management, economics, and investing can all be systemized into rules and understood like machines.
The book’s hundreds of practical lessons, which are built around his cornerstones of “radical truth” and “radical transparency,” include Dalio laying out the most effective ways for individuals and organizations to make decisions, approach challenges, and build strong teams. He also describes the innovative tools the firm uses to bring an idea meritocracy to life, such as creating “baseball cards” for all employees that distill their strengths and weaknesses, and employing computerized decision-making systems to make believability-weighted decisions. While the book brims with novel ideas for organizations and institutions, Principles also offers a clear, straightforward approach to decision-making that Dalio believes anyone can apply, no matter what they’re seeking to achieve.
What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time
By James O’Shaughnessy
Historically tested long-term strategies that always outperform the market.
Recent history has witnessed one of the worst stock market beatings ever. As a result, abysmal returns are being called “the new normal,” financial “experts” are ringing the death knell of buy-and-hold, and investors’ faith in equities has hit an all-time low. You have two choices. You can abandon the stock market based on what is happening today. Or you can invest today based on what will happen in the future.
Containing all new data, What Works on Wall Street, Fourth Edition, is the only investing guide that lets you see today’s market in its proper context― as part of the historical ebb and flow of the stock market. And when you see the data, you’ll see there is no argument: Stocks work.
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)
By Benjamin Graham
This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions…
The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.
Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.