I am so often asked - what is a 'value investment' strategy - this is my answer

Mark Watson-Mitchell - 14.10.2025

A value investment is a strategy where investors seek to buy stocks or other assets that appear to be undervalued by the market.

The goal is to purchase these investments at a price lower than their intrinsic value—what the investor believes the asset is truly worth based on fundamentals—and then hold them until the market corrects the price.

Key Principles of Value Investing:

1. Intrinsic Value:

   This is the estimated true worth of an asset, calculated using financial metrics like earnings, dividends, cash flow, and growth potential.

   
   

2. Margin of Safety:

   Value investors aim to buy at a significant discount to intrinsic value to reduce risk.

   
   

3. Long-Term Perspective:

   Value investing often involves holding investments for years, waiting for the market to recognise their true value.

   
   

4. Fundamental Analysis:

   Investors analyse financial statements, industry trends, and company management to assess value.

   
   

5. Contrarian Approach:

   
   

   Value investors often go against market trends, buying when others are selling.

   
   

   

   Just what is 'value investing' ?