Factor-based investing - a primer

Almost every investor has heard the name of Warren Buffett. Buffett, often referred to as the greatest investor of all time, is known for his portfolio performance and investing wisdom, which he frequently shares publicly. Several books have been written about his 'secret sauce' for investing success and have attempted to explain it through a mix of fundamental and psychological factors. The academic community, too, has researched the secret sauce - characteristics of securities that explain outperformance against markets (also called 'premiums'). These characteristics or properties can be called 'factors'.