What it means
Value investing seeks stocks priced cheaply relative to fundamentals (earnings, book value, cash flow). Originated by Benjamin Graham and popularized by Warren Buffett. The thesis: markets misprice assets, and buying the cheap ones produces excess returns over time.
Why it matters
Value has historically delivered ~3-4% annual excess returns over growth, but with multi-year periods of underperformance. The 2010s decade was a brutal time for value as growth dominated.
How to use it
Modern value investing has evolved beyond P/E and P/B. Look at earnings yield + ROIC, EV/EBITDA in context, and the quality of the underlying business - not just statistical cheapness.
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