Is value investing outdated or inaccessible?
Value investing has never been more important.
In the world of data, speed, and analytics, everyone is trying to stay ahead of another.
I would argue that other investing approaches such as day trading are becoming obsolete.
Most traders are now replaced with engineers because computers can do the order entry for us. People don’t execute trades as often anymore because machines can do it.
So what’s the value in “ value investing”?
Value investing takes a long term approach and assess the “true value” of the security.
This requires you to imagine 5 to 10 years in advance which machines are not able to perform such forward looking exercise.
Think about the company’s strategy…
How can a computer analyze that?
I would say not many computers can build corporate strategy into their model today.
But it is very easy to build technical analysis into computer using programming.
Once machine automate all the the simple tasks, the only tasks remaining are going to be big picture thinking and long term outlook where machines have a hard time imitating.
This is where value investing comes in.
Value investing is calculating the true value of the stock. However, in order to calculate the true value, you need to consider events that might happen in the future (new product release, future cash flow, potential problems, competitors, demand etc).
On a personal note, my returns significantly improved after incorporating value investing into my approach.
In fact, my strategy can be summarized into one sentence:
Value investing with stock options.
It’s the combination of finding a stock on discount plus using leverage that dramatically increase my investment return.
If you are interested in learning how you can maximize your return on the market, you can watch a 45 min webinar here:
This webinar outlines my investing strategy…
- How I use value investing to find high probability stock
- How I use stock options to multiply my return
- How I use triggers and technical analysis to save time and use only 5 to 10 minutes a day to manage my own portfolio
I also talk about other confirmations I used:
- How to find insider information (whether management is buying or selling your stock)
- and more…