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The way to wealth — value investing in equities

Aggregate Asset Management
Aggregate Asset Management12/25/2017 08:00 AM GMT+08  • 4 min read
The way to wealth — value investing in equities
SINGAPORE (Dec 25): is quite easy to understand but hard to implement because not every investor can stick to their conviction and analysis, but will instead succumb to the emotions of investing. It requires the investor to keep a level head and systemati
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SINGAPORE (Dec 25): is quite easy to understand but hard to implement because not every investor can stick to their conviction and analysis, but will instead succumb to the emotions of investing. It requires the investor to keep a level head and systematically implement his plan in a disciplined manner.

The value investor buys a dollar’s worth of asset for fifty cents or less. The stock market misprices stocks most of the time because of people’s fear, greed and apathy. What a stock sells for in the market can be quite different from its “fair value”. The value investor’s job is to determine a stock’s fair value and buy it when it is priced way below its fair value. The larger the difference, the safer the investment.

The value investor is not concerned with what the stock market is going to do next. He does not let the talking heads on TV affect his work.He takes the view that if he buys a stock, he is buying a share of a business. He determines the fair value of a business by understanding its business model and studying its financial statements. He embraces the idea that if one always owns a cross section of undervalued companies in the economy, one will end up quite rich.

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