Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.
Site’s Value Investment Fund’s 2020 Return: 35.46% Current Fiscal Year To Date 04/17/21 (179 Days): 48.1%
Dow Jones Industrial Average Return for 2020: 6.02% Dow Jones Industrial Average Return Fiscal Year to Date: 20.6%
S&P 500 Return for 2020: 15.28% S&P 500 Return Fiscal Year to Date: 21.2% S&P Composite 1500 Return for 2020: 15.01% S&P Composite 1500 Fiscal YTD: 22.6%
Russell 2000 Return for 2020: 18.5% Russell 2000 Return Fiscal YTD: 38.8%
The primary tenet of value investing is to to buy low and sell high. If done properly, average annual returns on an investment fund will exceed 30%. Value investing requires the investor spend some time creating a decision matrix for each pool of similar companies. This model is then implemented and updated on an annual basis. Value investing is in effect the exact opposite of day trading. Value investing takes advantage of time and this reduces the overall stress for a fund manager.
Value investing relies on four principles to ensure success.
The first is risk reduction by only working with high quality stocks; in general, work with the top 2,000 companies worldwide. Absolutely avoid penny and small cap financial instruments. Top companies reduce risk significantly due to their stability of earnings. Stability of earnings is the most important value derivative in business.
Secondly, value investors rely on intrinsic value to set the buy/sell range of market price for the respective stock. Intrinsic value is the core worth of a company. There are several different intrinsic valuation formulas and their application is a function of the company’s business model. There is no single universal intrinsic valuation formula.
In addition, value investors use financial analytics to validate operational and financial performance. This analysis allows the value investor to determine the most likely market price recovery point and its associated time frame to recover.
Finally, patience is required. Time is on the value investor’s side.
Value Investing – Value Investment Club
Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth.
Joining entitles you to the following:
Lessons about value investing and the principles involved;
Free webinars from the author following up the lessons;
Charts, graphs and resources to use when you create your own pool;
Access to the existing pools and their respective data models along with buy/sell triggers;
Follow along with the investment fund and its weekly updates;
White papers addressing financial principles and proper interpretation methods; AND
This past week, the Value Investment Fund grew 2.7% reaching a new all time high at $148,147 off a $100,000 investment 25 weeks ago.
This past week, the banking pool propelled the fund higher with its 5% growth during the week. Wells Fargo and Bank of New York released their financial results from the first quarter. ...
This past week, the Value Investment Fund grew 2.1% matching many of the major indices in the market.
The fund is well ahead of schedule and is on track to surpass 52% return for fiscal year 2021. Driving the unrealized gains are the REITs. This table illustrates how much has accrued since the purchases in late ...
The Club’s Value Investment Fund grew dramatically during March 2021. The Fund grew 10.1% driven by increases across the board for all investments. Total actual gain during March was $13,143 as illustrated in the report below.
As stated multiple times throughout the lessons and tutorials, high quality stocks have less risk and thus react remarkably well ...
Anytime the value investment fund improves more than 1% during a calendar week, it is a fair return. This past week, the Value Investment Fund grew 2.2% far outpacing all the major indices in the market.
The fund is well ahead of schedule and will surpass 48% return for fiscal year 2021; it is conceivable that ...
Within the railways pool of investments for the Club’s Value Investment Fund, Norfolk Southern Railroad is considered one of the better investments of the six existing railroads in the pool (soon to be five with the merger of Canadian Pacific and Kansas City Southern). It is a highly stable company and rarely performs poorly, either ...
Monitoring performance is the single best tool to ensure success with value investing. Comparing results against expectations provides the basis for good decisions. In business, this is known as the feedback loop. In effect, a variable input is changed, results are recorded, compiled and reported in a understandable format. Any unexpected results are analyzed and ...
After five of the prior seven weeks with 3.5% or more of growth per week, this past week saw the Value Investment Fund with a disappointing reduction in value of 2.6%. One of the drawbacks of value investing is that, at times, the investor feels like their portfolio just isn’t exciting. But at the end ...
Every student of investing is taught the core principle of discounted cash flows. This business principle is also used with intrinsic value. Application of discounted cash flows assists value investors in determining intrinsic value. Academia, major investment brokerages and the majority of investment websites place unquestionable belief in this single formula to equate value for ...
The Club’s Value Investment Fund had the best week, March 13, 2021, this fiscal year-to-date. The Value Investment Fund grew a whopping 6.5%, $8,867 over the prior week’s ending balance. This is all due to the COVID relief package signed into law. Over the past week, the DOW grew 4.0% and the S&P 500 grew ...
The Club’s Value Investment Fund increased another 4.2% during this past week. The initial goal was to achieve a 35% return for the entire fiscal year; this past week surpassed that goal. The facilitator believes the Fund’s total return will approximate 44% by fiscal year end (October 21, 2021).