Value investing looks for durable businesses trading at reasonable multiples of earnings, book value, or cash flow — often unloved sectors or companies with temporary problems.
Popularised by Ben Graham and refined by Warren Buffett, the style rewards patience and discipline. Value has gone through long periods of both dominance and underperformance versus growth.
See also
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Open Decision Lab →Frequently asked questions
Do I need to be a stock picker to value invest?
No — value-tilted index funds and ETFs exist and give exposure to the style without individual stock picking.
Related terms
Growth investing
Focus on companies expected to grow revenue and profit faster than average.
P/E ratio (price-to-earnings)
Share price divided by earnings per share.
Book value
A company's assets minus its liabilities — what would theoretically remain if it liquidated today.
Fundamental analysis
Studying a company's financials and business to estimate what its shares are actually worth.