Value investing for dummies

If you want to understand the value investing philosophy of Warren Buffett, the famous investor who is one of the world’s richest people, here is a simple guide:

First, you must understand what an asset really is. Without a correct understanding of this, many people accumulate ‘assets’ that makes them poorer:

Next, you must understand the difference between value and price. These two words are often used interchangeably and people often confused the meaning between the two. Hence, bad investment decisions are made as a result. This is the cornerstone concept to get right in order to understand value investing:

Once you understand the concept of value, here is how to measure the value of an investment:

The below article is slightly off from traditional value investing. Nevertheless, it is important to understand the effects of inflation on the value of your investments:

Now that we have got the mathematics part of value investing (i.e. the ‘science’ of value investing) out of the way, we will look at the ‘art’ of value investing. This is where experience, intuition, insights, street-smartness and business sense come in use: