Saturday, 4 July 2009

Value investing: No magic formulas

Some people look for a magic formula in investing that guarantees success.

Value investing isn't quite that simple.

There are so many elements and nuances that go into a company's business that you can't know them all, let alone figure out how to weigh them in your model.

So rather than a recipe for success, you will instead have a list of ingredients that should be in every dish. But the art of cooking it up into a suitable vlue invstment is up to you.

Like all othe investing approaches, value investing is both art and science. It is more scientific and methodical than some approaches, but it is by no means completely formulaic.

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