Why value investing works-
A piece on market behavior -
1. All promoters/business owners are value investors by nature.
A businessman who can go to china or bangladesh to save 2 rp on a component, is not going to buy ₹500 book value stock of his own company in ₹1000.
Eg.
Tata bought tatapower and motors in Q1 2020.
GMM and HUL promoters sold their positions at ATH.
2. Buying peace in chaos is value investing-
it gives you proper sleep knowing that you have too little to loose.
3. Where there are no entelopes , there are no lions - Thomas phelps.
When you buy a uncovered and ignored business you save yourself from stock price manipulation .
4. No problem of liquidity-
When you are buying a lot of people are selling and when you are selling huge no of people are ready to buy.
5. Speculation proof-
Speculation created by news affects you least because either the stock multiples are too low to show any effect, or they are already multibagger so some amount of spec. can't hurt them. Sometimes speculation give proper exits to value investors.
6. Media and twitter literally works for you-
Just look at media and twitter threads and you will know when is the best time to Exit 😀😀