“Price is what you pay for, value is what you get”. This well-known comment from the legendary investor Warren Buffet captures the essence of the value investing philosophy and provides the key to how Buffet amassed his wealth. Warren buffet being the icon of “value investors” has built a stupendous amount of wealth by practising disciplined value investing over years. Value investors believe that you are more likely to find undervaluation of assets in place and tend to invest in mature firms with substantial existing assets, albeit underperforming ones.
Value is very difficult to find in inflated markets and can only be seen when the markets have been sharply corrected. Bull market conditions make value investing look pointless. The value investing strategy will prepare investors for market corrections because undervalued stocks do not experience them. Value investment has the potential to perform better over the long run. A lengthier time might easily extend to intervals of more than five years.
However, if Warren Buffet is the icon for value investors, Peter Lynch occupies a similar position for growth investors. “Whenever you invest in any company, you are looking for its market capitalisation to rise. This can’t happen unless buyers are paying higher prices for the shares, making your investment more valuable.” This thesis by Peter Lynch completely stands on the opposite side of what value investing believes in. Growth investors are animated with the belief that growth too can be under-priced in some companies, and that the payoff to seeking out these bargains in growth is sufficient to justify the costs.
Diese Geschichte stammt aus der December 05, 2022-Ausgabe von Dalal Street Investment Journal.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der December 05, 2022-Ausgabe von Dalal Street Investment Journal.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
