I’ve a confession to say: I’m a Value Investor or at least is what I aim to be.
I’m sure a lot of you are wondering about what means to be a Value Investor.
To be a Value Investor is counterintuitive because it isn’t in the nature of human beings to behave like a Value Investor.
It’s precisely for that reason that it is the right path to follow. Do you remember? In the last article (8. Mr. Market) I spoke about the contrarian attitude of a good investor.
It’s very hard to be a contrarian because humans like animals are subjected to herd bias. 
Why is it so hard to be a contrarian? Because animals in the middle of the herd tend to behave like the other members of the herd, mostly when there is an upcoming threat and little time to think what to do.
Under pressure and in the middle of uncertainty we will follow the herd because we believe it’s safer to stay with the crowd. 
I would say that most of the time this is true, but sometimes the herd reacts in an emotional way through a self-reinforced pattern, because every member follows the next fellow and that generates a chain reaction (bubble, in the case of  the stock market. Remember GoPro chart?)
Today is a hard time for value investors. With a lot of money flooded in the system, whenever you put your money you will see your capital gain, but until
when? Remember, the economy follows cycles, and the winner it’s who is willing to stick with a different path for the long term, it’s who will cope with the entire cycle.

“Only when the tide goes out do you discover who’s been swimming naked.”

Warren Buffett

How can we navigate the financial sea in any weather?
Simple enough, we must be value investors and behave like a business owner. Like a good captain, we have to choose a great boat with a powerful engine, energy efficiency, and without holes in the shell. But because we don’t have infinite capital, we have to buy at the right price!
What does it mean to be a value investor? Or what is value investing?.
In the past article I broadly defined the concept when I spoke about the importance of thinking about yourself as a business owner, then like a business owner what it’s important for you are the business performances not what price Mr. Market offers you for your business.
As usual, I sum up the question with a quote:

“All intelligent investing is value investing, acquiring more than you are paying for. You must value the business in order to value the stock.”

Charlie Munger

Over time what counts about a business isn’t the emotional attitude of Mr. Market or the economic cycle. What really matters is how much money the business makes in order to grow, repurchase its own stocks or pay a dividend, the price follows the right path in the long haul.

I want to highlight two aspects of the value investor attitude:

• Contarian attitude
• Patience

It requires patience because it can takes time for the market to recognize the value of a company conversely it can takes times for Mr Market to offers you a good business at an interesting price.

The father of Value Investing once said:

“The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”

Benjamin Graham

While is the best student added:

“The stock market is a device for transferring money from the impatient to the patient.” 

Warren Buffett

In the next article, I will introduce the concept of fundamentals analysis.

Related article 9.1 Appendix – Economic cycles

Following chapter 10. Circle of competence

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Albert Einstein