CapitalatWork

An investment technique that searches for firms that have not been, to the investor’s mind, fully valued by the market and might be due for a re-rating. The manager of a portfolio will not want to pay too highly for stocks, unlike a growth manager, who will pay more for guaranteed growth prospects of a firm. The lines between the two camps - value and growth - are more blurred than these definitions would suggest. Growth managers dislike paying too much for growth, and value managers are unlikely to buy at any price a stock that is not growing.
Value investors don’t try to predict which way interest rates are heading or the direction of the market or of the economy, but only look at a stock’s current valuation.

Despite the vast and volatile changes in the economy and securities markets during the last several decades, value investing has proven to be the most successful money management strategy ever developed. Value investors’ success over the second half of the twentieth century proved not only the validity of the value approach, but its preeminence over even the most widely taught and practiced modern investment theory, which was developed in the 1950s and ’60s and remains dominant even today.

“Market commentators and investment managers who glibly refer to ‘growth’ and ‘value’ styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component - usually a plus, sometimes a minus - in the value equation.”

Warren Buffet on Value Investing
Berkshire Hathaway Annual Report 2000 - Warren Buffet MS ‘51, CEO Berkshire Hathaway Inc.