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.

There are three phases to the value investing program. The first phase consist of lessons 1 through 18 and introduce the concepts and principles of value investing. All eighteen lessons are open to the public. However, in some of these lessons, links exist to resources related to the respective pools of similar companies; access to that information/data requires membership status. 

The second phase consists of 34 additional lessons, Lessons 19 – 52. This phase of the program requires membership status. 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. 

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.

Value Investing Episode 1 – Introduction and Membership Program

  • Value Investing – Reasonable Expectations (Lesson 1)

    Value Investing - Reasonable Expectations (Lesson 1)
    Value investing is superior to other investment models over long journeys of time. In the short run, volatility can paint a false picture of success for other methods of investing. Adherence to core principles and preset buy/sell points will win, not in large increments, but will prevail over extended time in years. The key is ...
  • Value Investing – Risk Aversion (Lesson 2)

    Value Investing - Risk Aversion (Lesson 2)
    Value investing does require some volatility with the market in order to have opportunities to buy low and sell high. A static market, even one with level growth will not work with value investing. Fortunately, the market isn’t stable and volatility does exist. This volatility is driven by multiple forces: politics, interest rates, consumer patterns, ...
  • Value Investing – Market Fluctuations (Lesson 3)

    Value Investing - Market Fluctuations (Lesson 3)
    There is a hierarchy of forces that drive stock market fluctuations. Economic wide forces have the greatest impact overall. There are many different economic wide drivers of downward pressure or indicators of expansion. They include: 1) Federal Reserves’ interest rate adjustments that occur multiple times per year; 2) Acts of law by Congress; 3) Consumer ...
  • Value Investing – Holistic Approach (Lesson 4)

    Value Investing - Holistic Approach (Lesson 4)
    There are several underlying elements that make value investing so successful. Value investors cover all the respective elements no differently than how many people thoughtfully resolve problems. An holistic approach towards investing is utilized. This refers to to gaining an understanding of the respective industry and its members; i.e. understanding what makes the pool of ...
  • Value Investing – Primary Tenet of Business (Lesson 5)

    Value Investing - Primary Tenet of Business (Lesson 5)
    With the stock market, buying low and selling high is the goal for any investor. But the real problem, and it is depicted well in the illustration above, is knowing when the lows and highs exist. If you purchase the stock at its absolute lowest point in a cycle and then sold it at the ...
  • Value Investing – Principle #1: Risk Reduction (Lesson 6)

    Value Investing - Principle #1: Risk Reduction (Lesson 6)
    With value investing, steps are taken to dramatically reduce potential financial losses. Risk associated with financial loss is addressed through three important practices. The first and best defense against losses are the type of stocks purchased. Only the best are considered with value investing. The first section below explains this in more detail and illustrates ...
  • Value Investing – Principle #2: Intrinsic Value (Lesson 7)

    Value Investing - Principle #2: Intrinsic Value (Lesson 7)
    Intrinsic value is just one of the four principles of value investing. Intrinsic value sets the floor price of the investment; i.e. it is an automatic buy. Any price higher than this intrinsic value must be substantiated by other value investing criteria. In effect, other criteria may increase the buy point upwards of 20%. Intrinsic ...
  • Value Investing – Principle #3: Financial Analysis (Lesson 8)

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

    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 Investing – Financial Statements (Lesson 10)

    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 ...