Value Investing

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.

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. Look at these results.

Value Investment Fund's Two 1/2 Year Running Average Annual Return After Quarterly Taxes (28%) = 23.78% Thru 03/31/2022

This site's Value Investment Fund has outperformed all major indices since inception two and half years ago. A 23.78% annual return after taxes (28% tax rate) is simply unheard of with any fund in the market. This Fund's average annual pre-tax return is 31.09%. Here is a list of the major indices and their average annual pre-tax return over the last two and half years:
Businessecon.org's Value Investment Fund 31.09%

- Dow Jones Industrial Average 10.83% S&P 500 18.53%
- S&P Composite 1500 18.37% Russel 2000 13.73%
- NASDAQ 100 30.13% NASDAQ 26.25%
- Invesco QQQ 30.31% Vanguard Growth 24.83%

This exceptional return on capital investment demonstrates unequivocally how the principles of value investing simply outperform all other forms of investing. Only sheer coincidence with one's picks, referred to as 'luck', can beat value investing.

This site's Value Investment Fund's Annual Returns (Pre-Tax Basis):
. 2020 - 34.41%
. 2021 - 41.08%
Year-to-Date Thru 04/30/2022 - .41% (see chart below, click to enlarge)
Notice how this site's Fund had a positive return while all major indices had dramatic losses? This is due to risk reduction which is one of the four core principles taught in Phase I of this program. If you want returns like this for your investment fund, then learn more, click here: Membership Program.

A FREE alternative is to only receive updates on this Fund's performance via regular e-mails. Members receive regular updates, action announcements, in-depth analysis, portfolio reviews, and the education program. Subscribe for free updates only via this form:

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, Phase I of the program;
Free webinars from the author following up the lessons;
Charts, graphs and resources to use when you create your own pool, Phase II of the program;
Access to the existing pools and their respective data models along with buy/sell triggers, Investment Fund Pools;
Follow along with the investment fund and its monthly updates;
White papers addressing financial principles and proper interpretation methods, Phase III of the program; AND
Some simple good advice.

My Personal Guarantee:
This program isn’t for everyone. If you find this program too intense or not what you expected, TELL ME. Just be honest with me and I’ll refund your membership fee. This promise is good for the first year of the program. I’ve had folks tell me it is too much time committment or ‘the financial analysis is more than I can grasp’. It’s OK, I understand, everyone starts out with good intentions and then the realization sets in that security analysis is really detailed or takes more work than anticipated. I’m fortunate, I have a formal education in accounting; and also, I enjoy this deep analysis of companies and pools of investments. Therefore, I don’t want you to walk away thinking you got slighted by having to pay a membership fee for a program that just wasn’t right for you. Send me an email; I’ll refund your membership fee within about two days (I’m not at my desk 24/7).

When you join the Value Investing Club, you receive two separate programs. The first, the one most subscribers are interested in, is access to the activity and models of the Value Investment Fund. Each week, you get regular e-mails which provide recent activity and directives related to buys and sells of the pools’ potential opportunities. In addition, sometimes alerts are sent when opportunities exist with buys and sells of certain securities. In effect, you can mimic the performance of this site’s Value Investment Fund. The particular program venue provides the following benefits:

Access to at least six pools of industries and their corresponding potential corporate information (currently 46 members in the aggregate);
Each pool has its own decision matrix for buy and sell points;
Documented intrinsic values for the respective corporations;
Updated buy/sell points as companies report their financial achievements;
Alerts as securities get close to their buy and sell points;
Regular updates on the Value Investment Fund’s financial performance;
Weekly emails updating members about possible opportunities;
Access to a wealth of knowledge about value investing.

Although not required, it is encouraged for the subscriber to learn about value investing. This is the second aspect of this program.

The second program is oriented around educating the member about value investing. There are three phases to this part of the program. The first phase consist of lessons 1 through 18 and introduce the concepts and principles of value investing. This Phase I – Four Core Principles of the program teaches about the one core tenet of value investing and the four principles that make value investing so successful. This is a membership site and as such, you must register to join. Yes, there is a fee. The program is explained on the Membership page.

The second phase consists of 80 additional lessons, Lessons 19 – 98. These lessons go into deep detail about the respective individual steps to create a pool of similar investments and design the respective buy/sell model used with value investing. Issues covered in great detail include:

Understanding and interpreting financial statements;
Caluculating intrinsic value;
Evaluating financial status and potential returns; AND
Construction of a buy/sell model for the pool and its individual members.

Included in this phase are spreadsheets, formulas, graphs and resources for the value investor. An investment pool creation (hotels) is illustrated all the way through this batch of lessons. Phase II – Financial Analysis

The third phase is referred to as the sophistication phase. Here, the author explores additional tools a value investor uses to improve their overall return on investment and reduce risk. Topics covered include how to create counter positions that guarantee profitability; how to read the notes sections of annual reports to gain an advantage over institutional investors; when to dispose of underperforming investments and finally, learn how to utilize the formulas of value investing to leverage your return without any additional risk. Phase III – Sophisticated Investing

Value Investment Club

Value Investment Club Annual Membership
$129.99
Value investing utilizes a buy low, sell high tenet of systematic processing of stock and other security investments. Value investing reaps substantially greater returns than all other major market measurment indices (DOW, S&P 500, Russell 2000, NASDAQ, etc.). The average annual pre-tax return is 31.86%. When you subscribe, you receive access to all existing articles, books, lessons, webinars and reports explaining how value investing works. In addition, each week, the subscriber receives additional articles, reports and buy/sell points for high quality stock purchases. Follow along as the fund updates regularly and discover how to invest like a pro and earn excellent returns on your investment. Subscription is for one year of access to the value investing pool of information and formulas.

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Wendy’s – Intrinsic Value of Stock
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Shake Shack – Intrinsic Value of Stock
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Value Investment Fund – Status on September 30, 2021
Yes, during September the Value Investment Fund only held one position which was Wells Fargo. It only decreased in value a mere .6%. To make this even more interesting, during September, Wells Fargo was hit with two more fines from the agencies of the federal government totaling more than $300 Million and yet, Wells Fargo ...
Value Investment Fund – Status on August 31, 2021
Although the Value Investment Fund continues to grow, opportunities wane. It has been smooth sailing so far mostly due to an economic downturn in 2020 driven by COVID. Opportunities still existed into late 2020 of which this Fund took advantage. Now I have to add more potential opportunities or growth will amble along. There does ...
Value Investment Fund – Status on July 31, 2021
The Club’s Value Investment Fund keeps moving forward. During July 2021, the Fund’s balance improved $6,308, a 4% gain over the prior month. During July, the Fund sold both its holdings in Equity Residential and UDR. Both stocks reached their preset expected sales price triggering the sale of the stock.
Sold Equity Residential for $83 per Share/Purchased at $52 per Share
Throughout the last five months, over several different articles, the Fund stated that the goal for this particular investment within the REITs pool was to sell once the stock price hit $83 per share. On July 15, 2021 at 10:23 AM, the stock price hit $83 per share triggering the automatic sale of all 574.459 ...
Value Investment Fund – Status on June 30, 2021
The Club’s Value Investment Fund glided along during June 2021. The Fund grew a meager .4% driven by the sale of Essex Property Trust on June 18, 2021. Total actual gain during June was $582 as illustrated in the report below. During this time period, the Dow Jones Industrial Average decreased about one-tenth of a ...
Sold Essex Property Trust – 74.07% Annual Return
On June 18, 2021 at 2:56 PM, Essex’s share price dropped to $304 per share triggering a stop-loss order purchased a month earlier. This automatic sale of all 92.2638 shares netted $302 per share. The Value Investment Fund pays $1 per share for any transaction and also pays $1 per share for any option or ...
Value Investment Fund – Status on May 31, 2021
The Club’s Value Investment Fund continued to grow during May 2021. The Fund grew 3.35% driven by increases across the board for all investments. Total actual gain during May was $5,097 as illustrated in the report below. As stated multiple times throughout the lessons and tutorials, high quality stocks have less risk and thus, resist remarkably ...
Value Investment Fund Status Week 29 – Just Gliding Along
The Value Investment Fund continues to just glide along with only a .2% increase over the prior week. Although the DOW dropped 571 points, a mere .16%, the respective investments within the Fund improved. This again demonstrates the importance of only working with high quality companies and buying the investments with good margins of safety ...

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