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.

This Site’s Value Investment Fund’s 2020 Return: 35.46%

Dow Jones Industrial Average Return for 2020: 6.02%
S&P 500 Return for 2020: 15.28%

S&P Composite 1500 Return for 2020: 15.01%
Russell 2000 Return for 2020: 18.5%

The primary tenet of value investing is to to buy low and then 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. Secondly, value investors rely on intrinsic value to set the buy/sell range of market price for the respective stock. In addition, value investors use financial analytics to validate operational and financial performance. Finally, patience is required. Time is on the value investor’s side.

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

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    • Value Investment Fund Status Week 12 – Principles are Working.

      Value Investment Fund Status Week 12 - Principles are Working.
      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 ...
    • Purchased 292.0560 Shares Wells Fargo Bank

      Purchased 292.0560 Shares Wells Fargo Bank
      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 ...
    • Purchased 43.2994 Shares Essex Property Trust

      Purchased 43.2994 Shares Essex Property Trust
      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.
    • Value Investment Fund Status Week 11 – Good Week

      Value Investment Fund Status Week 11 - Good Week
      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 Essex Property Trust

      Intrinsic Value of Essex Property Trust
      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; ...
    • Sold Union Pacific – 23.66% Return in 72 Days

      Sold Union Pacific - 23.66% Return in 72 Days
      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 ...
    • Value Investment Fund – Status on December 31, 2020

      Value Investment Fund - Status on December 31, 2020
      On November 30, 2020, the 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 performed ...
    • Value Investing – Industry Standards (Lesson 13)

      Value Investing - Industry Standards (Lesson 13)
      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 ...
    • Value Investing – Business Ratios (Lesson 12)

      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)

      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 ...