BesterInvestor subscribes to value investing as an asset allocation philosophy.
We look for securities with prices that are unjustifiably low based on their intrinsic worth. There isn't a universally accepted way to determine intrinsic worth, but it's most often estimated by analyzing a company's fundamentals. Like bargain hunters, value investors search for stocks believed to be undervalued by the market, or stocks that are valuable but not recognized by the majority of other buyers.
Many value investors do not support the efficient market hypothesis (EMH). This theory suggests that stocks always trade at their fair value, which makes it harder for investors to either buy stocks that are undervalued or sell them at inflated prices. They do trust that the market will eventually start to favor those quality stocks that were, for a time, undervalued.
BesterInvestor trusts that the market will eventually favor quality stocks that were undervalued for a certain time. We are not concerned with the supply and demand intricacies of the stock market. In fact, we are not really concerned with the activities of the stock market at all, although we "watch" market activity all the time. This is the implication in this paraphrase of Buffet's famous quote: "In the short-term, the market is a popularity contest. In the long-term it is a weighing machine."
We look at each company as a whole, so choose stocks solely based on their overall potential as a company. Holding these stocks as a long-term play, we do not seek capital gain, but ownership in quality companies extremely capable of generating earnings. When we invest in a company, we are not concerned with whether the market will eventually recognize its worth. We are concerned with how well that company can make money, as a business.
Follow us, hit the like button, and subscribe if you like our content. Email Rudi directly at rudi@memorytrees.co. Memory Trees is the family's charitable foundation, and an affiliate of MTC Equity Partners, their Opportunity Zone investment fund.
