Introduction

Value Research has a long history of operating in the financial world. Over the years we have come across several investing principles, tested many of them and doubted some. The idea of value investing has stood the test of time. Value Research espouses the idea of value investing so much so that the word 'value' appears in its name also.

Given the fact that value investing is an old theory, the first proponent of which was Benjamin Graham, it has been interpreted differently by different people. We felt it would be good if we started with telling the readers what value investing isn't - the myths of value investing. The new value investor, in this way, will be well-informed as to what he should keep in mind. This book will go in greater detail of the concept of value investing, so by the time you finish the book, you will have a good knowledge of value investing.

To quickly test your existing knowledge of value investing, simply state whether the following statements are true or false.:

A real value stock trades at very low valuations. Sometimes you can get it even below the book value.

A company that distributes profits to its shareholders, in the form of dividends, is better than the one that rarely does.

Investing in gold does have short-term fluctuations, but it always pays off in the end.

A falling market is like a falling knife. If there is blood running through the streets, take your money and stay out.

If you answered true to any of the above questions, you will be surprised to know that all the above statements violate the principle of value investing, at least partly. In the following pages you will discover why.