Today marks the start of a new series, where we cover some of the classic lessons of Value Investing.

We start with something the Father of Value Investing said back in the day:

Sometimes, we are distracted by the price of a security in the short term due to market fluctuations. The market is never rational, it is driven by emotional people who look at things in an emotional manner. Therefore, it is all a popularity contest in the short term, thus a “voting machine” on a day to day basis.

However, in the long term, the market value and the stock’s intrinsic value approaches each other asymptotically. Therefore, it gives an indication of how much it is worth, a “weighing machine”.