The Financial Times Guide to Selecting Shares that Perform, 5th Edition

Way VII

Value investing

This way is for patient and analytical investors (type 2) who have a reasonably good knowledge of accounting.

What topics are covered in this chapter?

• The philosophy of value investing
• Does value investing work?
• What’s the catch?
• Anatomy of a value investor
• The rules of value investing
• Value investing and the stock market cycle
• Who is this way best for?
• Overall evaluation

The philosophy of value investing

Value investing is one of the oldest, most rational and most respected techniques for selecting shares. It rests upon that most simple and venerable law of capitalism: buy low and sell high. Value investing is certainly a philosophy, and sometimes a religion. At its simplest, value investing rests on ...