Value Investing

http://www.investopedia.com/printable.asp?a=/articles/05/012705.asp

The Idea of Intrinsic Value.

Intrinsic Value: the underlying fair value of a stock based on its future earnings power.

From a retail investor context, when we think of using Intrinsic Value to outperform the market we have to bear in mind that:
1. there are many smart people out there that know how to mathematically compute the intrinsic values of a company. In this area, it is no doubt that these smart people are more advance than any average retail investor
2. hence, for retail investor, using statistical & mathematical valuation alone is DEFINITELY not enough to outperform the market. We can only beat the market by looking at INTANGIBLE values, something that cannot be mathematically computed. What could be the INTANGIBLE values then? These are mainly: (a) management (b) company culture. No expert can put dollar value on how much a management or company culture is worth...
3. to outperform the market, retail investor need to look at a longer time horizon because prices reflected in market are very much short-term in nature

My main conclusion is this:
- mathematical valuations like PE & NTA are just the foundation
- the most important thing is still the management