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 Year To Date 07/23/21 (204 Days): 39.43%
Dow Jones Industrial Average Return for 2020: 6.02% Dow Jones Industrial Average Return Year to Date (2021): 14.56%
S&P 500 Return for 2020: 15.28% S&P 500 Return Year to Date (2021): 17.45% S&P Composite 1500 Return for 2020: 15.01% S&P Composite 1500 YTD: 17.39%
Russell 2000 Return for 2020: 18.5% Russell 2000 Return YTD: 11.89%
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
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.
During the week ending January 8, 2021, the Value Investment Fund expanded 1.3%. Whereas the DOW reported a stronger uptick of 1.5%. Again, exceptional growth for the fund is held in check due to the continued poor performance of the REIT Pool. The concerns about the ability of folks to pay rent during this lockdown ...
Intrinsic value of stock is a company’s realistic value per share at any given moment. Intrinsic value is not book value; it is the most likely dollar amount a reasonable person would pay for the underlying net assets. In most cases, an investor would include some value for the near-term future earnings of the investment; ...
Value investing is about buying low and selling high. The investor creates a model to set buy/sell triggers and exercises this program with investmetns. Back on October 29, 2020, the Railways Pool of the club’s Value Investment Fund purchased 114.9557 shares of Union Pacific at $173.98 each including a $1 per share transaction cost. In ...
On November 30, 2020, the Value Investment Fund’s balance was $114,576.76. During the month of December, the DOW Jones Industrial Average increased 3.28% from 29,603 to 30,606. This club’s fund, increased 1.44%. The difference is directly associated with the REIT pool. That pool’s balance on November 30th was $68,019, thus it decreased .4%; thus it ...
Have you ever wondered how the measurement of length called a ‘meter’ came to be? It is simply the distance light travels in a given time period. The key isn’t the actual definition, it is whom dictates this time period of travel. Some authority states that this is the definition of a meter (also written ...