Value Investing Defined

Value investing is the discipline of buying a business for less than its estimated worth, with a margin of safety. In this lesson, Professor Samuel Reed defines what value investing is, how it differs from speculation, and why the strategy focuses on business quality, price, and patience rather than short-term market movement.

You will learn the core mindset behind value investing: think like an owner, focus on cash generation, seek a reasonable purchase price, and accept that the market may be wrong for a long time. This lesson builds the foundation for later topics such as intrinsic value, financial statement analysis, and portfolio construction.