Before we delve into the world of value investing, it is vital to gain an understanding of why people should even bother to invest their hard earned money in stocks.  There are other options of where you can invest your money, such as bonds and gold, so why should stocks even be considered?

Source: Credit Suisse

The answer is simple – stocks have shown time and time again to deliver higher returns over the long run than other asset classes.

Thinking of stocks as a part-ownership of business

Viewing stocks as a part ownership of a business is in our view the right way to think about stocks. When you own the stock of a company, you become co-owner of that business and share in the profits with other shareholders.  Therefore, the more money the company makes, the more money you make. When you think of stocks this ......