Value investing.
A definition, in plain English — with the books that teach it.
What it means
The investment philosophy of buying assets for meaningfully less than their conservatively-estimated intrinsic value, holding through market noise, and refusing to confuse price with value. Originated by Benjamin Graham; institutionalized by Warren Buffett and Charlie Munger.
Example
A value investor looking at a $50 stock asks two questions: (1) what's this business actually worth per share, conservatively estimated? and (2) am I getting a discount big enough that I'm protected if I'm wrong about question 1? If the answer is roughly '$80 and yes,' they buy. If it's '$45 and no,' they pass — even if everyone's saying it'll hit $100 next year. Value investing is the OPPOSITE of trying to predict where a stock is going; it's about knowing what something is worth and waiting for the market to offer you a discount.
