Väärtusinvesteeringu

Väärtusinvesteeringu is the Estonian term for value investing. It is an investment strategy that involves picking stock that appear to be trading for less than their intrinsic or book value. Value investors actively seek out companies that they believe the stock market has undervalued. They believe the market may be overreacting to bad news, temporarily depressing the stock's price, or that the company has fundamental qualities that the market is overlooking.

The core idea behind value investing is that the market is not always efficient and that stock prices can deviate from their true worth. Value investors aim to profit when the market eventually recognizes the true value of these undervalued securities, leading to a price increase. This strategy was popularized by Benjamin Graham, often referred to as the "father of value investing," and his most famous student, Warren Buffett.

Key principles of value investing include thorough fundamental analysis of a company's financial statements, management quality, competitive advantages, and industry outlook. Investors look for metrics such as a low price-to-earnings (P/E) ratio, a low price-to-book (P/B) ratio, and a high dividend yield as indicators of potential undervaluation. Patience is also a crucial virtue, as it may take time for the market to correct its mispricing. Value investors are typically long-term oriented, focusing on the underlying business rather than short-term market fluctuations. They often seek a "margin of safety," meaning they buy stocks at a significant discount to their estimated intrinsic value to protect against potential errors in judgment or unforeseen negative events.