I am value investor.

What it Means to Be a Value Investor

I do not time the market or guess whether a stock's price will be higher or lower in a year. Most investors do. Even most so called "fundamental" research is an attempt to determine when to buy. Instead of focusing on when to buy or what the market will do next, Value Investors focus on the price one pays relative to the value one receives.

Advantages of Being a Value Investor

Value Investing is responsible for my long term investment success record. For example, since 2000 my IRAs are up 260% while the market as a whole is down 10%. As discussed bleow, it also helps me reduce risk.

I became a Value Investor because I realized that it was a tool to avoid the very human but bad investing practice of extrapolating the past into the future. Extrapolating the past leads one to buy at market tops (e.g. the market has been going up so it will continue to go up) and sell at market bottoms (e.g. the market has been going down so it will continue to go down). Most individual investors and a large majority of advisors fall into the extrapolating the past trap.

Let me give you an important illustration of the difference that Value Investing makes. The average company can only grow as fast as the economy does. Despite this the stock market rose by a factor of 13 from 1980 to 2000 while the economy grew only 3 times. In 2000 advisors who extrapolate the past took this dramatic 20 year price rise to mean stocks were a great asset and recommended that their clients hold large amounts of stock. In contrast, Value Investors like myself worried about the risk of paying so much more for the average company relative to its underlying economic value. Thus, since 1998 I have been telling everyone that the broad stock market's price was much higher than its value and to pull money from stock funds and put it in bond funds. As you know, in the last 10 years the stock market and virtually all stock funds performed as badly as in the depression years of the 1930s while bond funds produced a good return. The broad stock market is now about 11 times higher than in 1980 while the economy is only 4 times higher. Thus, it remains overpriced and I continue to advise low holdings of stock funds.

• Value Investing is the foundation for outstanding long term record of investment success.
• Also important are the analytical skills I learned as a Ph.D. in Computational Chemistry combined with my extensive financial knowledge. Together they enable me to identify investments whose intrinsic value is substantially higher than its current price. My investment record shows that I am good at doing this.
• Another reason for my success is being able to invest in companies too small for mutual funds and other institutions to invest in. Most of the world's companies are this small. This is important because the valuations of large companies don't differ very much from the market's average because thousands of professional investors evaluate them every day. By contrast, the valuations of small companies vary widely. I buy the ones whose market valuations are irrationally low. Note: Large financial service firms are big institutions and so can only recommend large companies. They do NOT allow their advisors to recommend small, obscure companies.

While the general stock market is overpriced, I have identified a few small, obscure companies from around the world that are selling well below what they should. Given past experience, I am confident that as a group they will produce an outstanding return. However, no investment is right for everyone – no matter how promising the returns. This is especially true of small, obscure companies. Let's find out if these stocks are right for you.

Call (609) 683-8005 today for a no-obligation, complimentary consultation.