Secret Value Investing Formula - You Never Find in Books

"I haven't stuck to any formula. Most great writers stick to the same style, but I wanted to be more various" ~Irwin Shaw

Do you believe reading investment books make you a successful value investor? If this is a question to me, I would easily say 'No'. Thoughts behind this ‘no’ are easy to understand. Investing books generally provide ideas on the best practices used by successful investors around the world. No books in this world guarantee a reader become successful investor if he follows the steps and ideas explains in it.

I have read lots of books. Thus, I have got lots of ideas on value investing but, if I don’t know how take it to practical; my total understanding is a waste. Before reading any guides on the practices of great investors, a reader should bear in mind that he is not the person who have abilities and skills similar to whom the guide is focusing. They are great investors and their style of thinking may entirely different than yours. In that way, reading investment guides provide you ideas behind the success of somebody but, not guarantee your success.

There are number of classic investment guides available in the market. ‘Intelligent Investor’ and ‘Security Analysis’ by Benjamin Graham, "Commons Stocks and Uncommon Profits" by Philip Fisher are some among them. It shares you the best practices of great investors but still not give any guarantee on your success if you follow this. Also, it would difficult for an ordinary person to digest such most advanced approaches by famous investors.

Secret Value Investing Formula - You Never Find in Books

Is there any other way to work self, to be a successful value investor? Yes there is. Read this example and mirror it. This is my secret formula for you to work yourself as a successful value investor.

Think you have planned to buy a mobile phone that is a must for you to survive. What all are the companies immediately come to your mind? A lot may be. But, you certainly shortlists some companies from this list those only manufacturing the model you are looking for. Once identified the companies, you will collect information on the features providing by the models from each company. The one with most attractive features and famous in market among people certainly attract you and you will decide to buy it!

Your next move is to identify the phone shops nearby. There may be n number of shops and you may personally walk into some of them to check whether the model is available and know their price. If you are an intelligent buyer, you never buy the phone from the first shop you visit. Instead, you will visit more dealers to find out their prices to know where you get the product in fewer prices. Once find, you will identify whether there are any discounts going on or is there any possibility in the near future to get a good discount on the product. If such is near, you will certainly wait for that and once the discount sale started, you will approach the shop and buy your most liked mobile phone!

At this time, you would be the happiest person because getting the right set with all features that you looking for and of course, in an amazingly less price! You will start using the phone and utilize all the facilities to the maximum possible before buying another, may be years later.

This is my secret formula. Apply above selection approach when buying a stock. Just go to market and identify the product or service around there as most famous and favorite in the nation and people not able to survive without. Shortlist companies who manufacturing such products or providing services. Identify the best one by comparing products or services from other companies. Study why it is most famous and what are the reason people around the nation not able to survive this product or service. Identify what features in the product or service that attracts people more than any similar products in the market from competitors. If everything fine, identify the best time to buy this shares. Do your workout to understand the best time to buy this stock when the stock prices are coming down and possibly getting it in a discounted price. Hold it for long term to create wealth for you. Now you have done successfully and understood the most simple, secret formula for value investing!

Of course, there is lots of processes involved in it. Some of them are, identifying right stocks to buy, difference between value and price, best time to buy, certain numerical analysis to understand the profit possibilities, managerial efficiency of the company etc. To succeed with such processes, you can now read some of the good books to get better understandings on the methods and practices used by great investors to tackle such tasks. This would give you right idea and knowledge from own practice.

If you happy reading this article and feel it help you lot, then pass this formula to five of your friends whom you feel this article will find interesting and helpful.

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