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Is Value Investing Dead?

by , 21 October 2020
Is Value Investing Dead?
If you type in ‘value investing' in Google, you'll find numerous articles claiming “value investing is dead”.

It's no surprise investors feel this way.

Growth stocks like the tech superstars have by far been the biggest winners in recent years - significantly outperforming their value peers.

With the continuous advancements in technology, you'd expect growth stocks to continue their stellar rally in the future.

While that may be the case, you shouldn't ignore value stocks today.

Here's why…

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“The easiest money I’ve ever made”
 
Benjamin Graham uncovered this investment secret in the 1930’s.
 
Warren Buffett uses it… and his partner, Charlie Munger uses it…
 
And Sir John Templeton made $100 million in six months with this strategy...
 
He called it the “easiest money” he ever made.
 
He was 88 years old when he said that.
 
Now regular investors can use this investment strategy to pull in large sums of money.
 
 
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The “saving grace” for value investors
 
Economic crises, market declines, and extreme market volatility are all unnerving for most investors.
 
However, times of high uncertainty and fear also create excellent investment opportunities – especially in value stocks.
 
The last two major market crashes – the dot.com bubble burst and the 2008 Financial Crisis – prove this…
 
 
You can see value stocks outperform their large cap peers after a crisis. In some cases, the numbers have been substantially higher.
 
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READ: The last five pickpocket trades in a row made investors a massive 420.38% return in the month of September… Find out more here.
 
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The reason for this is simple…
 
Massive market crashes tend to create extreme mispricing in value stocks, which become attractive to investors.
 
In fact, this is a valuable lesson I learnt from one of my favourite investors, Benjamin Graham.
 
 
After the stock market crash of 1929, Graham focused on companies trading at low valuations relative to their fundamentals like net asset value, earnings and cash flow.
 
And his investment approach worked well helping him generate a 21% average return for 20 years.
 
It even helped successful investors like Warren Buffett, Walter Schloss, Irving Kahn and William J. Ruane build their own fortunes.
 
Now I can’t guarantee value will repeat their outperformance once the Covid-Crisis settles...
 
But in the past, smaller value stocks have done far better than their larger counterparts during the recovery from market crashes.
 
So, is Value Investing Dead after all?
 
Most definitely not. In fact, there are many mispriced stocks that are about to outperform the markets like never before. You can read more about these stocks in my new report by going here…
    
See you next week.
 
Joshua Benton,
Managing Editor, Real Wealth
 
P.S. I’ve earmarked 3 of the best Ben Graham value investments on the stock market today, go here to claim them.


Is Value Investing Dead?
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