Value investing works because it is grounded in buying companies for less than their intrinsic worth and letting fundamentals drive long-term returns. By focusing on earnings power, cash flow, and true business value, investors position themselves to benefit when mispriced stocks eventually converge toward fair value. This disciplined approach favors patience, rational decision-making, and the compounding of high-quality opportunities over time.

At Astute Investor’s Calculus, we focus on small-cap value stocks because this is where mispricing is most common. In my 25+ years of investing, I’ve consistently found that small caps are overlooked by institutions and largely ignored by retail investors who concentrate on index-heavy large caps. This lack of attention creates persistent inefficiencies, allowing disciplined investors to buy fundamentally strong businesses at steep discounts to intrinsic value. It’s in these under-followed corners of the market where true value investing edges are built.