What is Value Investing? 

什么是价值投资?

Value investing is an investment strategy where stocks have selected that trade for less than their intrinsic values. Value investors actively seek stocks they believe the market has undervalued. Investors who use this strategy believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with a company's long-term fundamentals, giving an opportunity to profit when the price is deflated.
 
价值投资是选择低于其真实价值投资的股票的投资策略。 价值投资者积极寻找股票,因为他们相信市场将会有被低估的股票。 使用这策略的投资者认为有些市场将会对好和坏消息反应过度,导致股票价格变动不符合公司的长期基底,并会在价格下跌时抓住机会买入。
 
 

Undervalued stocks come about through investor irrationality. Typically, value investors seek to profit off this irrationality by selecting stocks with lower-than-average price-to-book ratios, lower-than-average price-to-earnings ratios and/or higher dividend yields. These numbers are compared to a company's intrinsic value, after which, a value investor invests if the comparative value is high enough.

估值过低的股票将通过投资者不合理性的行为显现出来。 通常在这种情况下,不合理性的价值投资者会通过选择低于平均水平比的股票,低于平均水平的市盈率和/或更高的股息率来获利。 当这些数字与公司的真实价值进行比较后,价值之间的比较足够高,价值投资者就会开始投资。

However, there is an issue with value investing in that estimating the intrinsic value of a stock is difficult. Two investors can be given the exact same information and place a different value on a company. For this reason, another central concept of value investing is that of "margin of safety." Value investors need to buy an equity at a big enough discount to allow some room for error in the estimation of value.

然而,价值投资存在着一个问题,那就是要分析其真实价值并非件容易事。 两个投资者可以获得相同的信息,但他们或许他们会为公司设下不同的价值。 因此,价值投资的另一个中心概念就是“安全边际”。 价值投资者需要以足够大的折扣购买股权,以便在价值估计中留有一定的误差空间。

Additionally, value investing is subjective. Some value investors only look at present assets and earnings and do not place any value on future growth. Other value investors base their strategies completely around the estimation of future growth and cash flows. Despite the different methodologies, the underlying logic is a value investor should buy something for less than he thinks it is currently worth.

此外,价值投资是主观的。 一些价值投资者只关注现有资产和收益,对未来增长却没有任何价值的资产。 其他价值投资者的策略则是完全围绕未来增长和现金流的估计。 虽然有着不同的方法,不过依照逻辑,价值投资者买的股票应该是要比目前的价值低的。


Value investors seek to profit from market overreactions that usually come from the release of a quarterly earnings report. On May 4, 2016, Fitbit released its Q1 2016 earnings report, and saw a sharp decline in after-hours trading. After the flurry was over, the company lost nearly 19% of its value. However, while large decreases in a company's share price are not uncommon after the release of an earnings report, Fitbit not only met analyst expectations for the quarter but even increased guidance for 2016.

 

季度收益报告的发布后,常造成价值投资者通过市场的过度反应会寻求获利。 2016年5月4日,Fitbit发布2016年第一季度业绩报告,发现后市场交易大幅下降。 在股票结束后,公司损失了近19%的价值。 然而,公司股价的大幅下跌在盈利报告发布后并不罕见,但Fitbit不但达到分析师对本季度的预期,甚至还增加了对2016年的向导。

 

The company earned $505.4 million in revenue for the first quarter of 2016, up more than 50% when compared to the same time period from one year ago. Further, Fitbit expects to generate between $565 million and $585 million in the second quarter of 2016, which is above the $531 million forecasted by analysts. The company looks to be strong and growing. However, since Fitbit invested heavily in research and development costs in the first quarter of the year, earnings per share (EPS) declined when compared to a year ago. This is all average investors needed to jump on Fitbit, selling off enough shares to cause the price to decline. However, a value investor looks at the fundamentals of Fitbit and understands it is an undervalued security, poised to potentially increase in the future.

 

该公司2016年第一季度的收入为5.504亿美元,比一年前的同期增长了50%以上。 此外,Fitbit预计2016年第二季度将产生5.65亿美元至5.85亿美元的利润,高于分析师预测的5.31亿美元。 该公司看起来是进而强大和增长。 然而,由于Fitbit在今年第一季度投入大量的研发成本,每股收益(EPS)与一年前是相比的下降。 这是因为平均投资者跳上Fitbit,卖掉足够的股票,而导致价格下降。 然而,价值投资者会关注Fitbit的基本面,并了解它是一种被低估的安全性,并有望在未来能继续增长。

 

(Source from: Investopedia)



 

History of Value Investing?

价值投资的历史?

Benjamin Graham (格雷厄姆)

 

Benjamin Graham established value investing along with fellow professor David Dodd.

Value investing was established by Benjamin Graham and David Dodd, both professors at Columbia Business School and teachers of many famous investors. In Graham's book The Intelligent Investor, he advocated the important concept of margin of safety — first introduced in Security Analysis, a 1934 book he co-authored with David Dodd — which calls for a cautious approach to investing. In terms of picking stocks, he recommended defensive investment in stocks trading below their tangible book value as a safeguard to adverse future developments often encountered in the stock market.

本杰明·格雷厄姆与同行教授戴维·多德(David Dodd)一起建立了价值投资。价值投资由本杰明·格雷厄姆和戴维·多德,哥伦比亚商学院的教授和许多着名的投资者老师建立。 在格雷厄姆的书“The Intelligent Investor”书中,他倡导了安全边际的重要概念 - 1934年,他与David Dodd合作撰写了 “安全分析”,该书内容要求对投资必须采取谨慎的方法。 在拣选股票方面,他建议对股票交易低于有形账面价值的防御性投资,是作为对股市市场经常遇到不利未来发展的保障。

 

Further evolution (进一步演变)

However, the concept of value (as well as "book value") has evolved significantly since the 1970s. Book value is most useful in industries where most assets are tangible. Intangible assets such as patents, brands, or goodwill are difficult to quantify, and may not survive the break-up of a company. When an industry is going through fast technological advancements, the value of its assets is not easily estimated. Sometimes, the production power of an asset can be significantly reduced due to competitive disruptive innovation and therefore its value can suffer permanent impairment. One good example of decreasing asset value is a personal computer. An example of where book value does not mean much is the service and retail sectors. One modern model of calculating value is the discounted cash flow model (DCF), where the value of an asset is the sum of its future cash flows, discounted back to the present.

然而,价值的概念(以及“账面价值”)自20世纪70年代以来发生了变化。 账面价值在行业中最为有用因为大多数资产是明确的。 不明确资产如专利,品牌或商誉很难量化,并且可能无法在公司分开后单独生存。 当一个行业正在经历快速的技术进步,其资产的价值将不容易估计。 有时,当破坏性创新的竞争增加,资产的生产力将会降低,因此其价值可能遭受永久性的损害。 降低资产价值的一个好例子是个人计算机。 账面价值并不意味着服务和零售部门的一个例子。 一个现代的计算价值模型是贴现现金流模型(DCF-Discounted Cash Flow),其中资产的价值是其未来现金流量的总和,以及折扣回到现在的价值。

(Source from Wikipedia)

Father of Value Investor

Source from: Google Images 

Benjamin Graham

Benjamin Graham (born Benjamin Grossbaum; May 9, 1894 – September 21, 1976) was a British-born American investor, economist, and professor. He is widely known as the "father of value investing," and has written two of the founding texts in neoclassical investing: Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949). His investment philosophy stressed investor psychology, minimal debt, buy-and-hold investing, fundamental analysisconcentrated diversification, buying within the margin of safetyactivist investing, and contrarian mindsets.

His work in managerial economics and investing has led to a modern wave of value investing within mutual funds, hedge funds, diversified holding companies, and other investment vehicles.

本杰明格雷厄姆(出生本杰明Grossbaum; 1894年5月9日 - 1976年9月21日)是一个英国出生的美国投资者,经济学家和教授。 他被广泛地称为“价值投资之父”,并在新古典主义投资中写了两篇创始文章:安全分析(1934)与David Dodd和智能投资 (1949)。 他的投资理念强调投资者心理学,最低债务,买入和持有投资,基本分析,集中的多元化,在安全边缘买进,激进投资和逆向思维。他在管理经济学和投资方面的工作导致了共同基金,对冲基金,多元化控股公司和其他投资工具的现代价值投资浪潮。

(Source from Wikipedia)

Source from: Google Images 

Warren Buffet 

He is an American business magnate, investor, and philanthropist. He is considered by some to be one of the most successful investors in the world and as of March 2017 is the second wealthiest person in the United States with a total net worth of $78.7 billion.

After graduating at 19, Buffett enrolled at Columbia Business School of Columbia University, learning and eventually creating his investment philosophy around a concept pioneered by Benjamin Grahamvalue investing. He attended New York Institute of Finance to specialize his economics background and soon after began various business partnerships, including one with Graham.

他是美国商业巨头,投资者和慈善家。 他被一些人认为是世界上最成功的投资者之一,截至2017年3月是美国第二个最富有的人,总净资产为787亿美元。19岁毕业后,巴菲特在哥伦比亚大学哥伦比亚商学院注册,学习并最终创造他的投资理念围绕本杰明·格雷厄姆价值投资开创的概念。 他参加了纽约财经学院,专门研究他的经济背景,很快开始了各种业务合作,包括与格雷厄姆。

(Source from Wikipedia)

Application of Value Investing

简单价值投资应用方法

Value investing is one of the best known stock-picking methods. In the 1930s, Benjamin Graham and David Dodd, finance professors at Columbia University, laid out what many consider to be the framework for value investing. The concept is actually very simple: find companies trading below their inherent worth. 

 

价值投资是最知名的股票选择方法之一。 在20世纪30年代,哥伦比亚大学的财务教授本杰明·格雷姆和戴维·多德阐述了许多人认为这是价值投资的框架。 这个概念其实很简单:就是找到公司交易低于他们固有的价值。

The value investor looks for stocks with strong fundamentals - including earningsdividendsbook value, and cash flow - that are selling at a bargain price, given their quality. The value investor seeks companies that seem to be incorrectly valued (undervalued) by the market and therefore have the potential to increase in share price when the market corrects its error in valuation

 

价值投资者寻找具有强劲基本面的股票,包括收益,股息,账面价值和现金流量 - 以合理的价格出售,并考虑到其质量。 价值投资者会寻求被市场错误估价(低估)的公司,因此当市场纠正其估值误差时,其就会有可能增加股价。

 

We should emphasize that the value investing mentality sees a stock as the vehicle by which a person becomes an owner of a company - to a value investor profits are made by investing in quality companies, not by trading. Because their method is about determining the worth of the underlying asset, value investors pay no mind to the external factors affecting a company, such as market volatility or day-to-day price fluctuations. These factors are not inherent to the company, and therefore are not seen to have any effect on the value of the business in the long run. 

 

我们应该强调,价值投资心态将股票作为一个人成为公司所有者的手段  - 对于价值投资者,利润是通过投资于优质公司而不是通过交易。 因为他们的方法是确定相关资产的价值,价值投资者不介意任何会影响公司的外部因素,如市场波动或日常价格的波动。 这些因素不是公司固有的,因此从长远来看,这些因素对企业的价值并没有任何影响。

 

While the efficient market hypothesis (EMH) claims that prices are always reflecting all relevant information, and therefore are already showing the intrinsic worth of companies, value investing relies on a premise that opposes that theory. Value investors bank on the EMH being true only in some academic wonderland. They look for times of inefficiency, when the market assigns an incorrect price to a stock. 

 

虽然有效市场假设(EMH - Efficient Market Hypothesis)声称价格总是反映所有相关信息,因此已经显示公司的真实价值,价值投资却依赖于一个反对该理论的前提。 价值投资者对EMH的投资只在一些学术领域是正确的。 当市场对股票分配不正确的股价时,他们将寻找低效率的股票。

Value investors also disagree with the principle that high beta (also known as volatility, or standard deviation) necessarily translates into a risky investment. A company with an intrinsic value of $20 per share but is trading at $15 would be, as we know, an attractive investment to value investors. If the share price dropped to $10 per share, the company would experience an increase in beta, which conventionally represents an increase in risk. If, however, the value investor still maintained that the intrinsic value was $20 per share, s/he would see this declining price as an even better bargain. And the better the bargain, the lesser the risk. A high beta does not scare off value investors. As long as they are confident in their intrinsic valuation, an increase in downside volatility may be a good thing. 

 

价值投资者也不同意高β(也称为波动性或标准偏差)会转化为投资的风险。 一个真实价值为每股20美元,但交易价为15美元的公司将会是一个对价值投资者有吸引力的投资选择。 如果股价下跌到每股10美元,公司将会遇到β的增加,这通常表示投资风险会增加。 然而,如果价值投资者仍然认为真实价值是每股20美元,那么他/她将把这种下降的价格看作更好的交易。 交易越多,风险越小。 高β不会吓跑价值投资者。 只要他们对自己的真实估值有信心,下跌波动次数的增加可能是一件好事。

 

Here is a breakdown of some of the numbers value investors use as rough guides for picking stocks. Keep in mind that these are guidelines, not hard-and-fast rules: 

 

  1. Share price should be no more than two-thirds of intrinsic worth.

  2. Look at companies with P/E ratios at the lowest 10% of all equity securities.

  3. PEG should be less than one.

  4. Stock price should be no more than tangible book value.

  5. There should be no more debt than equity

  6. Current assets should be two times current liabilities.

  7. Dividend yield should be at least two-thirds of the long-term AAA bond yield.

  8. Earnings growth should be at least 7% per annum compounded over the last 10 years.

 

以下是投资者用作挑选股票的一些粗略指南。 请记住,这些是指南,而不是硬性规则:

 

1.  股价应该不超过真实价值的三分之二。
2.  看看公司的P / E比率是所有权益证券中最低的10%。
3.  PEG应小于1。
4.  股票价格不应超过有形账面价值。
5.  债务不应多过比股权
6.  流动资产应为流动负债的两倍。
7.  股息收益率应至少为长期AAA债券收益率的三分之二。
8.  在过去10年里,盈利增长率应至少为每年7%。



 

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© 2019 by Lim Sen Tian (Tony Lim). Proudly created by WCT Worldwide Training LLP

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