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
In keeping with the value investment fund’s pattern, on Friday the 29th of January, 2021 the Fund sold 113.6363 PUTS on Union Pacific Railroad. These PUTS have a strike price of $175 and are currently sold at $6.24 each. The Fund netted $5.24 each after a $1 per PUT fee. Total realized value equals $595.45 ...
An investment fund is a collection of capital from one or more individuals and is used to purchase financial instruments of various companies or other funds. The most common types are brokerage funds that allow incremental purchases from members. These funds are often dedicated to a certain group or type of investment. These groups or ...
The banking pool of the Value Investment Fund purchased 232.9373 shares of Bank of New York Mellon Corporation trading at $41.93 at close of business on Friday January 22, 2021. Total investment is $10,000 for 232.9373 shares at $42.93 including a $1 per share exchange fee.
After careful analysis, it was determined that the bank’s stock ...
During the week ending January 22, 2021, the Value Investment Fund was stagnant; it decreased $54 off of $119,496. Whereas the DOW reported a slight uptick of .6%.
At the beginning of the week, the Value Investment Fund’s status stood at $119,496 (see Week 12 report). During the week, Wells Fargo released its preliminary results for ...
Value investors utilize pools of similar companies all belonging to the same industry in order to reduce risk, create accurate buy/sell models and manage their portfolio of investments in their investment fund. It is essential that all potential investments in a pool have similar attributes including market capitalization, comparable operations, indistinguishable balance sheet relationships and ...
During the week ending January 15, 2021, the Value Investment Fund grew a whopping 1.3%. Whereas the DOW reported a slight downward change of .6%. Exceptional growth for the fund was boosted by the results tied to the REITs Pool. REITs grew 5.8% in one week. The principle of patience is beginning to show itself ...
The Value Investment Fund purchased a second tranche of Wells Fargo Bank shares today, January 14, 2021, at 12:45 PM. Total investment is $20,000. The price per share including a $1 per share transaction fee is $35.78.
This particular investment is a part of the Banking Pool for the Club’s Investment Fund. The stock is currently ...
Today, Comerica’s stock price hit the sell point in accordance with the buy/sell model for Comerica Bank. At the market’s opening this morning, January 14, 2021, the stock quickly jumped past $65 per share. The order to sell is set at $65 per share. Total proceeds net of $1 per share transaction fees was $23,677.40. ...
With a tangible book value of approximately $33 per share and a current market price of $33.24 per share, the Banking Pool diversified its portfolio and purchased 292.056 shares of Wells Fargo Bank this morning. The company is due to report its quarter results later this week.
Including a transaction fee of $1 per share, the ...
Today, the Value Investment Fund purchased a second tranche of Essex Property Trust. After calculating the intrinsic value of Essex Property Trust at $256, the REITs Pool allocated $10,000 for a second purchase of Essex once the price dipped below $230 per share. Today, 01/11/21 at 12:38 PM, the stock price dropped to $229.95.