While I was walking the dog on Sunday, a gentleman recognised me and asked what my next column was about. I said I would look at the mindset of value investing. He was a supporter of this approach, but also pointed out how some value funds simply refuse to turn, no matter what, and languish at rock bottom for way beyond the normal long-term investment horizon.

In theory at least, value investing is a simple concept. Perform your analysis; discover shares that appear to be undervalued; and hold them until they become fully valued. In practice, it is often much more difficult, as the general market direction often confounds the cleverest of analysts.

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