The concept of value investing was introduced by the successful investor and teacher Benjamin Graham in 1934 in a book titled *Security Analysis*. In his second book, *The Intelligent Investor*—published in 1949—he explained this concept in a very simple manner.

People had historically viewed the stock market as a form of gambling; however, after losing millions of dollars during the market crash of 1929–30, Benjamin Graham undertook extensive research and formulated a theory of investing. In this theory, he explained that every company possesses an “intrinsic value” (true worth) that is distinct from its share price. Unlike the share price, this intrinsic value does not fluctuate on a daily basis, as it depends on the company’s fundamental strength and its capacity to generate profits. For any given company, these underlying factors do not change overnight; rather, they evolve gradually over time. Consequently, a company’s intrinsic value shifts slowly over the long term, whereas its share price tends to fluctuate rapidly over short periods. Under these circumstances, it frequently happens that a company’s share price falls below its intrinsic value. Graham termed such an entity an “undervalued company”—signifying that the company is available at a price lower than its true worth (i.e., at a discount). Conversely, when a company’s market price exceeds its intrinsic value, he referred to it as an “overvalued company”—indicating that the company is trading at a premium relative to its true worth.

Benjamin Graham posited that if one wishes to generate profits in the stock market, one should invest in companies whose shares are trading at a low price—specifically, when their share price is lower than their intrinsic value. And we should sell them when they become ‘overvalued’—that is, when the price of their shares exceeds their intrinsic value. Friends, Benjamin Graham was also Warren Buffett’s mentor; it was he who taught Buffett. He imparted the strategy of value investing to Buffett. Today, by following in his mentor’s footsteps and leveraging precise timing for his success, Warren Buffett has emerged as an even greater investor than his teacher. Through his articles and interviews, he has also taught others how to invest—and by applying these lessons, many investors have earned substantial wealth.