Topic 1.2: The History of Value Investing

The History of Value Investing?

Every powerful idea has an origin story. In our last chapter, we introduced the "what" of Value Investing—a rational philosophy for buying stocks for less than their true worth. But to truly grasp its power, you must understand the "why" and the "how." What if I told you that the secret to navigating today's unpredictable markets wasn't conceived in a modern high-tech trading firm, but forged nearly a century ago in the ashes of the greatest financial crash in history?

Picture the scene: the Roaring Twenties have come to a screaming halt. The Wall Street Crash of 1929 has wiped out fortunes, shattered dreams, and plunged the world into the Great Depression. The market is a landscape of fear and ruin. In this chaos, where most saw only loss and despair, one brilliant mind saw an opportunity—not for quick riches, but for enduring wisdom. He dared to ask a revolutionary question: what if we could strip away the emotion, the panic, and the speculation, and create a safe, logical framework for investing that could withstand even the most brutal storms? This wasn't just a new theory; it was a complete paradigm shift, a rebellion against the reckless gambling that had led to disaster. It was the birth of a playbook that would be passed down through generations, creating some of the world's most successful investors. So, who was this pioneer, and what timeless secrets did he uncover in the wreckage of Wall Street?