Financial Quotient

What is value investing?

Value investing is an investment style that seeks firms whose stock prices do not reflect their intrinsic or fundamental value. Value investors believe markets are inefficient, which creates this mispricing.

They try to identify firms they consider undervalued but are expected to come back in the future, often going against contemporary market sentiment.

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A version of this article appeared in the print edition of The Sunday Times on May 13, 2018, with the headline 'What is value investing?'. Print Edition | Subscribe