Investing in Philippines: Investing word of the day: Value Investing


Wednesday, October 5, 2011

Investing word of the day: Value Investing


I have been writing about this term just like in my post Stock Trading vs. Stock Investing and it is related to my post Investing word of the day: Market Price

Lets get a formal definition of these term from

The strategy of selecting stocks that trade for less than their intrinsic values. 

Also I have been discussing intrinsic value in conjunction with value investing. Intrinsic value is the actual value of the stock after considering current results and future earnings and valuable events that will benefit the company and will make the company profitable in the near future.  

Now do you see why the likes of Warren Buffett take advantage when stocks of great companies like his very own Berkshire Hathaway Inc. (BRK/A) which currently trades at $110,300 per share buy when the market price of such stock goes below its intrinsic value?


In times like this Value investing is one of the best strategy one can employ. Yes the stocks are low so low that your regular monthly savings of 5,000 pesos can now buy 2 or more lots of stocks as compared before. It is a way of positioning one's self before the rise of such great stocks. Though it may take some time before these great stocks shine, their intrinsic values cant be ignored. 

Once these stocks pick up and rises traders will be running after it hoping to ride it but as for those who have purchased it when it was still so low we are seeing a 2, 3, 4, or even a 5 bagger profit on such stocks.


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