Chapter 2: Why I Still Buy $1 for 50 Cents – And How It Works in Any Market

This is Chapter 2 of my book Mastering Value Investing: Practical Strategies for Real-World Results. Go there for links to the other chapters.

Most investors say they believe in long-term investing. Very few actually behave that way when prices fall.

Every market crisis exposes the same uncomfortable truth: prices move faster than businesses and fear almost always overwhelm logic. This is precisely why value investing continues to work - not because it is easy, but because it is psychologically hard.

In this chapter, I explain why markets cannot be perfectly efficient as long as humans are involved. Short-term prices are driven by narratives, headlines, and panic. Long-term outcomes, however, are driven by business fundamentals.

I also share how I learned to separate true bargains from value traps. A cheap stock is not automatically a good investment. Declining industries, weak business models, and fragile balance sheets can stay “cheap” for years. 

This chapter introduces the thinking framework I use to analyse businesses like an owner, not a trader. It explains why patience is not passive, why discipline matters more than intelligence, and why protecting capital always comes before chasing returns.

What this summary does not reveal is how I apply valuation, margin of safety, and final decision rules - those are reserved for readers who choose to go deeper.

If you’ve ever wondered why markets keep offering opportunities that most investors miss…

this chapter explains the why — and hints at the how.

🔒 The complete chapter is available to subscribers.

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Disclaimer & Disclosure

I am not an investment adviser, security analyst, or stockbroker.  The contents are meant for educational purposes and should not be taken as any recommendation to purchase or dispose of shares in the featured companies.   Investments or strategies mentioned on this website may not be suitable for you and you should have your own independent decision regarding them. 

The opinions expressed here are based on information I consider reliable but I do not warrant its completeness or accuracy and should not be relied on as such. 

I may have equity interests in some of the companies featured.

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