The advantages of value investing

Value investing – buying shares that trade at less than their intrinsic value – works. So why doesn’t everyone do it? Phil Oakley explains.

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.

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Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.