Value Investing

Here is something many new investors do not realize: the glossy annual report your broker links to and the 10-K filed with the SEC are not the same document. One is a marketing tool. The other is a legal document. As a value investor, you should spend most of your time on the legal document.

I lost real money learning most of these lessons. That’s not false modesty, it’s just the truth about how most of us actually learn to invest. I started out believing that cheap stocks were safe stocks. I thought a low P/E ratio was all the protection I needed. I was wrong on multiple counts, and

Investors are constantly reminded that the markets are efficient and there is no use trying to beat the market as it cannot be done on a consistent basis. In fact, we are told that over 70% of the mutual funds fail to beat the market, presenting this as evidence to somehow imply, in some convoluted

Checklist investing is a simple process with tremendous benefits. Checklists can protect you from yourself and propel you towards investment success. Atul Gawande is known for writing The Checklist Manifesto – a book where he describes how checklists protect us from our cognitive biases. In 2001, a doctor working at John Hopkins Hospital, Peter Provonost, wanted to

Have you ever met an 11-year-old shareholder? That’s what Warren Buffett’s life was about at that age. At the tender age of eleven, the boy who would go on to become the Oracle of Omaha was already fiddling around in the stock market, having bought a few shares of Cities Service. Today, Buffett is one

Small cap stocks generally have a liquidity problem. This is one of the reasons why most investors stay away from small cap stocks. This is also one of the reasons why good undervalued stocks are easier to find in this asset class. The market for highly liquid stocks is also normally highly efficient. The price