What is Value Investing?


Have you ever experienced finding a very low purchase price on an item that you've been researching for months to buy? The first thing that happens is that you quickly compare this new price to your past pricing experience of this item, right? Then you say to yourself, "why is this item priced like this?". And, then of course, you do your homework on the item which usually leads to substantiate that the item is either missed priced or only worth that sum at this time for whatever reason.

This is the very process that "value managers" experience as they sift through a myriad of public companies to add to their portfolios as they look for a real bargain. Their question is always, "why is this asset priced this way?". As they do their research, many portfolio managers looking for deep value, find that the company has been misunderstood, underestimated or otherwise analyzed incorrectly. This produces a possible "value stock" in their opinion.

Recently on a conference call, I heard a value manager describe a company that was making a product proposal to a prospective buyer that was not well known in industry news. This possible deal would then make this company worth much more than its current price. This would be an example of a "value" purchase.

Success in all your efforts,


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John R. Kinkead

Vice President of Wealth Advisement