What Is Value Investing? Timeless Principles for Long-Term Investors
- Marco Bartoli
- Apr 13
- 4 min read
Updated: Apr 17
Written by Marco Bartoli
Founder & Principal Investment Manager of Bartoli Value Capital, a value investing firm.
In This Article
What Is Value Investing?
At its core, value investing is simple:
Buy a dollar for fifty cents—and wait.
It’s not about chasing the hottest trends, timing interest rates, or predicting next quarter’s earnings. It’s about buying good businesses at good prices and holding them long enough to let compounding do its work.
The roots of value investing trace back to Benjamin Graham, widely considered the father of the discipline. His 1934 book, Security Analysis, co-written with David Dodd, laid the foundation for generations of investors. Graham taught at Columbia Business School, where he mentored a remarkable group of students—including Warren Buffett—who would go on to build exceptional long-term track records.
The Tortoise Beats the Hare: Why Value Investing Still Works
In 1984, Warren Buffett gave a now-famous talk called The Superinvestors of Graham-and-Doddsville. He didn’t pitch a new theory. He simply presented a question:
“If markets are efficient, how do you explain this group of value investors—taught by the same man—who’ve consistently beaten the market for decades?”
These investors—including Walter Schloss, William Ruane, Charlie Munger, Tom Knapp, and others—were all disciples of Benjamin Graham’s teachings. They didn’t copy each other’s portfolios or follow a secret formula. But they shared the same foundational philosophy: that price and value often diverge, and that disciplined investors can exploit that gap.
Even more compelling: Buffett shared actual performance data in the foreword to the famous book The Intelligent Investor, demonstrating that many lesser-known Graham-Dodd investors had consistently outperformed the market over long periods—something modern finance academics deemed impossible under the Efficient Market Hypothesis.
Value Investing vs. Speculation
Value investors aren’t trying to outguess the next earnings report or jump into stocks because they’re “going up.” That’s speculation. The difference lies in mindset:
Value Investing | Speculation |
Buys based on intrinsic value | Buys based on price momentum |
Long-term ownership mindset | Short-term trading mentality |
Focuses on fundamentals | Focuses on charts and hype |
Embraces volatility | Fears volatility |
Independent Thinking in a Noisy Market
One of the most underappreciated aspects of value investing is independent thinking.
Value investors often buy when others are fearful—and sell when others are euphoric. They ignore Wall Street’s short-term stock ratings, which often follow momentum and sentiment rather than underlying value.
As Buffett once put it:
“You’re neither right nor wrong because people agree with you. You’re right because your facts and reasoning are right.”
Core Principles of Value Investing
Here are the core principles that unite most value investors:
Intrinsic Value Matters: A company’s real worth is based on its future cash flows—not its stock price.
Margin of Safety: Always leave room for error. If your estimate of value is wrong, a low purchase price protects you.
Long-Term Thinking: Compounding takes time. Decades, not quarters.
Business Quality Counts: Great businesses with durable competitive advantages tend to outperform over time.
Management Integrity: Trustworthy, competent leaders are essential.
Why Most Investors Stray
If value investing works, why don’t more people follow it?
Because it’s harder than it looks.
It requires patience in a world of instant gratification.
It demands discipline when markets are euphoric or panicked.
It often means standing alone when everyone else is rushing in the opposite direction.
To quote Charlie Munger:
“It’s not supposed to be easy. Anyone who finds it easy is stupid.”
Pioneers and Practitioners of Value Investing
Benjamin Graham may have lit the spark, but others have carried the torch forward.
Here are some of the most notable value investors:
Benjamin Graham (Father of Value Investing, Columbia professor)
Warren Buffett (CEO of Berkshire Hathaway, prior: Buffett Partnership)
Charlie Munger (Vice Chairman of Berkshire Hathaway)
Seth Klarman (Baupost Group, author of Margin of Safety)
Joel Greenblatt (Gotham Capital, author of The Little Book That Beats the Market)
Walter Schloss (Graham disciple, independent investor)
Irving Kahn (Kahn Brothers, Graham assistant)
Jean-Marie Eveillard (First Eagle Funds)
Michael Price (Mutual Series Fund)
Howard Marks (Oaktree Capital)
William Ruane (Sequoia Fund)
Mohnish Pabrai (Pabrai Investment Funds, Buffett follower)
Li Lu (Himalaya Capital, advised Charlie Munger)
Tom Knapp (Tweedy, Browne)
Guy Spier (Aquila Capital, author of The Education of a Value Investor)
Is Value Investing Still Relevant in 2025?
The names have changed. The tools have evolved. But the principles remain timeless.
Whether it’s 1929, 2000, or today—value investing works because it’s rooted in human behavior, not just numbers. Markets will always swing between greed and fear. The value investor patiently waits for opportunity, acts rationally, and avoids the herd.
In a world dominated by noise, algorithms, and hype, value investing is still the quiet, patient discipline that works—because it’s built on timeless truths.
Final Thoughts
At Bartoli Value Capital, we believe the most enduring edge in investing isn’t speed or technology—it’s temperament.
Value investing isn’t about beating the market every quarter. It’s about stacking the odds in your favor over years and decades. It’s about treating investing like a business, not a game.
And most of all, it’s about having the courage to think independently—and the patience to let compounding work its magic.
