What is value investing
Buying businesses for less than they are worth based on earnings and assets, and waiting for the market to recognize it. The method of Benjamin Graham and Warren Buffett.
Margin of safety
The core idea: pay well below the estimated value, so a mistake in the estimate does not become a loss.
What our data says
In our study, buying with a margin of safety (below a computed intrinsic value) did not add a reliable 12-month edge. In the study of 13F portfolios, the only thing that held up was accumulation: stocks that managers had been adding to did somewhat better than the rest, a small gap.
Frequently asked questions
Which investors follow value investing?
Warren Buffett, Seth Klarman, Li Lu, Mohnish Pabrai, Tom Russo and Mason Hawkins, among others.