Value investing is a sensible investment strategy if you are a patient investor.
Ideally, you buy shares of a stock when it is undervalued, hold patiently— sometimes for years—until it is fairly valued, and then sell, take your profits, and repeat the process. But how do you decide when a stock is undervalued?
Amateurs use simplistic measures like price/earnings ratios, but experts dig deeper, looking at cash flow, debt levels, historical valuation patterns and much more.
Cabot publishes two investment newsletters that provide expert value investing advice to both individual and professional investors.
First is the classic Cabot Benjamin Graham Value Letter. Benjamin Graham was Warren Buffett’s teacher at Columbia University in 1950, and his system of evaluating companies has been the foundation of many successful investing systems over the decade.
A key concept of the Benjamin Graham investing system is the idea of Margin of Safety, which is achieved by buying only when a stock is below its Maximum Buy Price. If you implement just this one practice in your own investing, you minimize your potential losses, while maximizing your potential profits.
Second is Cabot Small Cap Confidential, designed for the experienced investor who’s looking to develop big profits from investing in little-known small companies with great growth potential. These stocks are generally priced below $10 a share, which means upside potential is very big. The key to success is buying them at the right time, and that’s where we can help.
For information on Value Investing, read our free special report, "Best Large-Cap Value Stocks.
" or "Best Small-Cap Value Stocks."
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Click on these links for more information on Value Investing:
Value Investing Frequently Asked Questions
Cabot Benjamin Graham Value Letter Editor Roy Ward answers common questions on his value investing strategy.
Value Investing Takes Advantage of Market Fluctuations
The basic principal is simple: the stock market and the individual stocks that make up the stock market have always bounced back and forth from overvalued to undervalued to overvalued.
Value Investing Questions
Cabot Benjamin Graham Value Letter Editor Roy Ward responds to some thought-provoking questions from his readers.
Some Value Investing History
The investment principles taught by Graham at Columbia University became legend in the field of professional stock analysis.
Guide to Value Investing
This guide explains the value investing strategy and defines intrinsic value and margin of safety.
Making the Case for Value Investing
For every hyper-inflated stock, there is an undervalued stock with a low price to earnings ratio, strong balance sheet and a solid outlook.
Two Systems to Evaluate a Stock's Value
The PEG ratio finds undervalued growth stocks, and the Benjamin Graham value investing system finds bargain-priced value stocks.
Warren Buffett's Seven Investing Guidelines
Warren Buffett learned well from Benjamin Graham, and made one successful value investment after another. These seven guidelines will help you to invest like Warren Buffett.
On Adding Bonds to your Value Portfolio
This little known Benjamin Graham strategy for value investing that will undoubtedly lead to success in this difficult stock market and in future markets.
How to Know Whether a Stock is a Bargain
Roy Ward shows you how to figure out which bargains are for real, and which ones are not.