The advantages of value investing

Value investing – buying cheap shares, or shares that trade at less than their intrinsic value – works. So why doesn’t everyone do it? It comes down to the way people’s minds work.

Lots of people want to buy and own the shares of great businesses. That’s understandable. The trouble is, great businesses are often bad investments. That’s because people know how good they are and so push the price of their shares up accordingly. Buyers then pay too much for them and get disappointing returns.

That’s why value investors often have better results. By buying shares that are temporarily [...]

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