Value Investor

See Value Investing.

A value investor is one who buys stocks that, she believes, have hidden value that Wall Street just isn’t appreciating.

So uh, aren't all investors value investors? They want to buy low and sell high or at higher prices, i.e., they find "hidden" value in the prices of a given security.

A value investor, generally speaking, waits until a stock with good core assets stumbles. The company falls on short-term hard times and maybe "should" trade at 20 bucks a share. But Wall Street was angry and disappointed that the company grew revenues only 7 percent, instead of the expected 15 percent for a quarter or two, and the Street sold down the stock from 18 to 7.

The proverbial baby is thrown out with the bath water. So, at this point, the value investor steps in and buys the stock big, but likely sells the stock when it goes from cheap to being fairly priced. Like...back at that 20-dollar target where it was supposed to be earlier, all else being equal.

The normal cycle would then have the value investor sell those shares to a growth or momentum investor, whose credo is more like "buy high and sell higher" versus the value investor, who is all about "buy low, sell when fairly priced."

Not as sexy. But you can make big bank in value-land. Just ask that one centi-billionaire who loves all-you-can eat restaurants. What's his name again? (Hi, Warren. We heart you.)