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.

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
• Some simple good advice.

Value Investment Club

• Value Investment Club Annual Membership
  $99.99
  Value investing utilizes a buy low, sell high tenet of systematic processing. Along with patience, value investors reap substantially greater returns than most of the market measurment indices (DOW, Russell 200, S&P, etc.). During 2020, this investment fund earned a 35.4% return while the DOW generated a 6.9% return. 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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• Value Investing – Business Ratios (Lesson 12)

  
  Business ratios are used to compare similar companies within the same industry. RULE #1: DO NOT USE BUSINESS RATIOS TO COMPARE COMPANIES AGAINST EACH OTHER IF THEY ARE IN DIFFERENT INDUSTRIES. Business ratios are not perfect, they have their respective flaws and it is important for value investors to understand the algorithms used with business ratios. ...

• Value Investing – Key Performance Indicators (Lesson 11)

  
  All of us use indicators everyday to help us manage our lives. These indicators assist us with making good decisions. This same concept exists with stock investments. There are several different indicators related to stock. Most of them are financial in nature and often summed up via business ratios. However, many of the top companies ...

• Value Investment Fund Status Week 9 – No Change

  
  During the week ending December 25, 2020, the Value Investment Fund expanded 1.6%. Whereas the DOW reported a slight uptick of .04%. The lack of action by the President to sign the relief bill passed by Congress greatly affected the markets as a whole. Both the S&P 500 and the 1500 Composite Index only marginally ...

• Value Investment Fund Status Week 8 – Patience

  
  Patience is essential with value investing. It is difficult because it just can’t get here soon enough. However, the models will prevail and the returns on the investment will be lucrative. Be patient. With the REIT Pool of investments, the model indicates that it will take about 10 months to reap an excellent reward; it has ...

• Value Investing – Financial Statements (Lesson 10)

  
  To comprehend financial information, first the member must understand their general purpose and how they are prepared. The first section of this lesson introduces financial statements and their two primary purposes. In addition, pertinent issues are introduced that a company must endure to finally present a well prepared set of reports. Next, each of the ...

• Value Investment Fund Status Week 7 – Tough Week

  
  During the week ending December 12, 2020, the Value Investment Fund retracted 4.26%. Whereas the DOW only reported a decrease of .6%. The lack of action in Congress greatly affected the REIT Pool as its value decreased 6.25%. Inaction to support the economy overall affects confidence in the ability of tenants to pay their respective ...

• Sold PUTS Norfolk Southern Railroad

  
  With options, an owner of stock fears a sudden steep drop in price and thus they may purchase an option called ‘PUTs’ to force someone to buy the stock at a preset price. The key for the owner of a PUT is to set a floor price for their existing stock position. A seller of ...

• Value Investing – Principle #4: Patience (Lesson 9)

  
  This lesson isn’t about emphasizing patience, it is about understanding how patience actually creates financial wealth in the market. Unlike day trading which is not much more than gambling, value investing is about earning good returns on one’s investment. The decision models built will never create instantaneous wealth, they are simply designed to take advantage ...

• Value Investment Fund Buys 369.9593 Shares of Comerica Bank

  
  The value investment fund’s banking pool includes Comerica Bank. Based on the investment’s buy/sell model, this morning prior to opening, an order for 369.9593 shares at $53.06 was entered. Including the cost of $1.00 per share, total investment is $20,000. The preset sell price is now set at $65.00. Based on historical information, it is believed ...

• Value Investing – Principle #3: Financial Analysis (Lesson 8)

  
  Financial analysis is the basis to set up a predictable and reasonable market price for the respective stock. This becomes the sell price point or what is often referred to in this series of lessons as the recovery point. If all three forces (economic, industry and company level) are performing reasonably, then the stock price ...

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