Understanding The Value Investing Philosophy

The value investing philosophy was pioneered by Benjamin Graham and has been popularly put to great use by Warren Buffett (who needs no introduction). The core ideas behind this philosophy can be summarised as follows:

• Price does not always equal value
• The price you pay for something is only relevant in relation to its value
• The essence of value investing is to purchase shares of a company at a price that is substantially lower than the company’s underlying value.