Value investing principles we all must adhere to
valunvestors and analysts often look at value investing in contradistinction to growth investing. Quite often, they converge; which means a growth stock may also be a value stock if it is appropriately priced. It is common for people to mistake low P/E stocks to be value stocks but that may be a slightly misleading approach to value investing. Normally value stocks are those that offer a substantial margin of safety. The margin of safety of a stock is defined by the extent to which the market price of the stock is below the intrinsic value of the stock. Wider the margin of safety, the better the value stock. 0:00 / 0:00 Skip in 5 Value stocks are also the ones with a moat that is not yet recognized by the market. A company may have a unique advantage like a vast distribution network, cash cow products and disruptive new ideas which may not be reflected in the price. These can also be value stocks. Value stocks hold huge potentia...