The Art Of Value Investing To Create Wealth You do not require a stratospheric IQ, luck, or insider information to be a successful investor. If you are a serious value investor, you would know about the father of value investing – Benjamin Graham. The two most famous value investors, Warren Buffet and Charlie Munger were the students of Graham, who further refined his valuation principles. Warren Buffet quoted, “By far, the best book on investing ever written,” the book named “The Intelligent Investor” by Benjamin Graham, presented the idea of the value of a company not being equal to its price and how an intelligent investor can make use of that to his advantage. Here a few intelligent and experienced ideas to follow to be an intelligent value investor: Do not monitor fluctuating prices You should Value Investing Stocks only when you feel comfortable holding it in the future without looking at the regular price fluctuations in the market. A traditional investor would generally buy a stock when he sees the prices rising continuously. He buys at a higher price, and then the stock starts to fall from there. Unfortunately, he ultimately has to sell it at a lower price. Value investing is the opposite of this, where you buy good businesses at a cheap rate and sell them high. When investing in the value of a business, it should always be for the long term. The regular market fluctuations should not shift your mood or opinion about the stock you have researched for. Invest in fantastic businesses and management The company you pick should be an industry leader or a decent brand and have a competitive edge in its sector. Focus on the Return on Equity of the company. The company's growth should not be at the cost of putting in more capital by the management to increase the working capital requirement. The earnings and cash flows should be decent. Moreover, look at the vision, character, and intention of the management. The attitude of management towards its minority shareholders and their thought process makes all the difference between two leading value companies. Do not go for growth stocks The profits which a company earns are limited.
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