The Business of Value Investing.pdf

242 The Business of Value Investing

easier. But understanding how the mind is wired to think and work-

ing toward eliminating the misconceptions can ensure that a lot of

investment blunders don ’ t get repeated.

Key Takeaways

• Every investor makes mistakes. The key is to realize those mistakes and
  prevent them from occurring again and again.


• Value and growth are two sides of the same coin to value investors. The
  greatest creator of long-term value is earnings growth.


• Investing in growth-at-reasonable-price businesses does not always mean
  investing in low P/E businesses. Some of the best value opportunities lie in
  temporarily unprofi table enterprises.


• Businesses selling below book value are not automatic homerun invest-
  ments. Unless you delve deeper into the fi nancial statements, a company’s
  book value may not be as sound as it seems.


• Understand that the mind is prewired with tendencies that can be hurt-
  ful to an investor. Investors should strive always to go back and ask them-
  selves what could go wrong before making any investment.

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