Microreviews

Value investing is a technique taught by Ben Graham and David Dodd. Warren Buffet used this technique to become one of the greatest investors ever.  In value investing, focus is on buying stocks of great business going through a rough patch or when true potential is still not realized by market. This is the time when stocks of these companies are trading much lower than their true worth. In investment jargon worth of a company is called intrinsic value.

The trick is to identify such companies and stay invested for a very long horizon. It is very difficult to evaluate a company’s intrinsic value as it is function of many things ranging from numbers to quality of management. It needs a seasoned person to calculate this value. The other painful aspect is to stay invested for a long time amid stories of superman stocks and overnight riches. But the fruits are enormous if one prudently follows this technique. Value investment made Warren Buffet amongst world’s top 10 richest people as per Forbes.

Money screams but wealth whispers. If you can mute those screams, commit money for long horizon, aim towards long term wealth creation then value investment is the way to go.

Fidelity India has recently launched ‘Fidelity India Value Fund’. This fund by objective will focus primarily on undervalued stocks. Fund will also invest in foreign securities. Here is an offering for people willing to go the Warren Buffet way.

I will keep all the readers of microreviews informed about performance of this fund.

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Tags: Benjamin Graham, Business, Investment, Stocks and Bonds, Value investing, Warren Buffett