Value Investing

This strategy involves buying stock at a price lesser than the intrinsic value of it. The philosophy is, buy a stock of an outstanding company rather than a generic one.

This strategy is followed by most famous investors including Warren Buffet, Raamdeo Agrawal. Benjamin Graham is known as a father of this theory. Warren Buffet is known to be his disciple.

Value investing means buying a stock worth Rs. 100 at any price lesser than this. It must be noted that this strategy is suitable for long term. The most number of books on investments is based on value investing.

This strategy is the complete opposite of momentum investing, which was discussed last week. In value investing, the stocks are to be bought cheap. However, in momentum investing, those stocks are bought which are on a trend of going up.