Value investing is an investment style, which favors good stocks at great prices over great stocks at good prices. Value investor extraordinaire Warren Buffett has used this style to become a billionaire. Even though we can’t promise such sweet success for everyone who uses this method, Value Investing For Dummies can show you how to use this disciplined, proven methodology help you make better-informed investment decisions.

Value Investing For Dummies guides anyone from rookie to savvy investor through the often-confusing maze of value investments and value investing techniques. Some level of familiarity and experience with investments and the world of investing is required—not that the information within these pages is hard or scary, but it will just flow more smoothly if you have a base level of knowledge of the topic.

Value Investing For Dummies takes you on a journey to the tried-and-true principles of valuing stock as one would value a business. (After all, how can you disconnect the two, as a share of stock is a share of the business?) This book covers tools that every value investor must be aware of and use, such as: annual reports, income statements, balance sheets, and price/earnings ratios. Value Investing For Dummies uses these tools to create a complete overview of this proven investment approach. You’ll discover why annual reports and information contained in them are so important, how you should use that information to improve your investing, and when you should make your investments. This book also features:

• A primer in value investing math
• Definitions and examples of frequently used value investing terms
• Profiles of successful value investors such as Warren Buffett
• Advice on where to find good value investments

From assessing financial statements to factoring in intangibles, Value Investing For Dummies shows you, step-by-step, how to calculate a company’s intrinsic value, zero in on bargains, and make sensible investments.

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(This is not to say that such books were of no value to me or won't be for you. It is simply stating the obvious: without a solid grounding in how to evaluate, and quantify, what any of the businesses I looked at were worth, I was strongly limited in my efforts of making good investment decisions. I was able to tell, for instance, that a company was competently run but not whether it would earn enough in the future to justify its current price. And that, as every rational investor will tell you, is key to achieving investment success.)

_Value Investing for Dummies_ assumed virtually nothing. Sure enough this meant much in the book was a review of what I had already learned from others (and might be for you too) but to my mind there's nothing wrong with relearning what is already known. (Better to do so with a book at least than with one's own money.) In assuming little-to-nothing of the reader, the authors give the reader all the tools he or she needs to invest profitably in the future.

Crucial to the dummy reader and, in this case, that means me, the book shows how to understand the _language_ of business: accounting. Since this is where the book shines, I'll pause here to allow the authors themselves a chance to explain what it is they're setting out to do. In Part 2 of the book titled "Fundamentals for Fundamentalists" the authors state their intentions as follows:

"We open the value investor toolbox by first engaging in a short exploration of investing mathematics . . . Next up is a discussion of information and information sources key to the value investor. Then, we dig in further with a tour of the financial statement landscape, including balance sheets, income statements, and cash flow statements. Ratios and ratio analysis are explored as a way to make more sense of these numbers. Finally, we help you to find and interpret non-numeric influences in the value equation."

In the next section, Part 3, the authors again state their intentions:

"We help you to assess or _appraise_ the value of a company and relate that value to the stock price. We examine some of the proven methods of business value asessment, including intrinsic value, book value, discounted cash flow, and the strategic profit formula. Then we sprinkle in a dash of intangibles (investors shouldn't live by numbers alone) and discuss buy and sell decisions. To bring these tools and techniques together into a system, we use none other than the full example of the master, Warren Buffett. Finally, to provide practice and reinforcement we present case studies of value, and for further reinforcement we resort to the age-old technique of showing opposites: examples of _un_value."

As a reader of the book, and now a reviewer, I have the duty to tell you that the authors have done exactly what they intended to do--and they have done it well. The style is such that even somewhat boring topics seem lively and the technique, as it is explained above and practiced throughout, simply can not be improved upon. The crystal-clear definitions of accounting terms and financial ratios, the detailed explanations showing what they mean and why they are important, the real-life example of Warren Buffett, and the case studies taking you all the way through the process step-by-step make this book truly the best place to start for anyone interested in investing.

13 of 14 found the following review helpful:

Value Investing for DummiesMar 22, 2005
By Globalex
It is a good book for beginners in the subject of value investing. It is quite comprehensive but a bit long-winded at times.

The only problem I find is that, for practical purposes, it stated that either you create your own intrinsic value model using Excel/Lotus spreadsheet or use the prepackaged Web model - the Quicken Stock Analyzer. However, to use the Quicken Stock Analyzer, you need to be a member. To get a Quicken.com Member ID, you need a current version of Quicken 2001, 2002, 2003 or 2004. When you install and register your copy of Quicken, you can specify your desired Quicken.com Member ID at that time.

If you, a beginner, does not use Quicken software or does not know how to input the given formula into the Excel worksheet - tough. Another way is to read a more difficult book by A. Damodaran on value investing.

Other than the above, the book is a good introduction and the first book to be read on value investing.

11 of 13 found the following review helpful:

SloppyJun 24, 2008
By Ratatosk
This book is an introduction to 'value investing'. The book does have its good points but it is overall a bit too sloppy. Some of the problems are:

The figures containing crucial financial statements are printed in a low resolution making them utterly unreadable (a magnifying glass will not help).

Some formulas are incorrect, for instance the intrinsic value formulas on top of page 204, which should have been exponential. These formulas are crucial to value investing.

Some phrases are almost incomprehensible and require effort to grasp. The authors are also very repetitive and often say the same things twice or more even within the same paragraph. There are many intermediate overviews of sections to come which are too abstract to be understood for a novice in these matters.

There is too much focusing on accounting in the first part of the book, yet without going into enough detail or examples to truly understand what is going on.

There are too many assumptions on the reader. Phrases like "this ratio is just as it sounds", "this ratio is straightforward", etc. appear often. If the reader felt these were trivial matters, then why pick up a book called "... for dummies"?

The authors put an effort into being funny (and sometimes succeed). But this is bad for readers who are novices because they do not know what is irony and what is serious. The section titles are also too 'clever' and do not convey much meaning to those who are not already in the know. I also do not like how the authors liken investment to flying airplanes, etc. because it's merely confusing to the reader.

For an introduction to 'value investing' I would instead recommend Joel Greenblatt's 'The little book that beats the market' and a good introduction to accounting is Thomas Ittelson's book 'Financial Statements'.

13 of 19 found the following review helpful:

Dont Buy ItAug 22, 2007
By Ziggles
I am flat out Pissed Off that i paid for this book and i am most likely going to write a letter to the publisher and request my money back.

There are Countless typos within this book. Stupid things like forgetting a period, spelling errors, and print errors like a margin overlapping text. These are minor and not really a big deal but the following is...

As you probably know value investing is rooted in understanding a company up and down... this requires a view into their balance sheets and other financial data. This book attempts to explain this BUT the images of balance sheets they use are UNREADABLE! It looks like they used a small image of the balance sheet and blew it up to the point that the distortion just makes it totally unreadable.

After a few pages of that, and text that referenced unreadable images i said screw this book and moved on.

I highly suggest you find another value investing book... normally i really like the Dummies books, but this one is just no good.

0 of 1 found the following review helpful:

Good IntroductionJan 22, 2011
By Spider Monkey
This is a good introduction to the topic of value investing. It covers all aspects of the theory, from working out intrinsic and strategic value to basic information on Warren Buffet (a key value investor). It is clear to read (as most Dummies books are) and gives a thorough grounding to go out and find some shares you may want to invest in. I'd also recommend 'The Intelligent Investor' by Graham, as well as 'The essays of Warren Buffet' by Lawrence Cunningham. If you're completely new to investing then I'd suggest 'Investing for dummies' first, before you look at this book on a specific investment theory. Overall, a good read and one of the better places to start if you're interested in value investing.

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