The Right Attitude to Value Investing

Value investing is based more on philosophy than on theorems.  Benjamin Graham's purpose was to make his students use the deductive process to think for themselves.

The three key concepts of Benjamin Graham's value investing are:

• Having the right attitude
• The importance of margin of safety
• Knowing the Intrinsic value.

To be successful, a value investor must adopt the right attitude toward investing in general, and an aversion to speculation in particular.  A speculation is not an investment.  Graham insisted, and it is crucial to be able to distinguish between the two.

Graham frowned upon market timing.  He insisted that any financial decision based solely on the prediction that the market will move up or down is a speculation.