What is 'value investing'?
What do we call value investing? How can we define this approach? Álvaro Guzmán de Lázaro, Investment Director at Azvalor, responds:
"For me, value investing is buying something for less than it's worth. It's what we all try to do in our daily lives. The thing is, things generally cost what they're worth. Throughout our lives, you might try to buy a television cheaper in one place or another, but it's difficult to find real bargains, although they can be found. Generally, bargains tend to have some flaw. Those pants with a defect, a tear, you buy them for less than they're worth, and maybe the defect isn't so serious. In the stock market, sometimes shares are trading at what they're worth, and it doesn't give you any opportunity. And sometimes they're trading below what they're worth. That's what value investing is. Trying to buy them when they're below what they're worth. And not hesitating—when they're below what you think they're worth—that "One of us has to be right, because then nothing ever gets done."