[devdimi]

I have been doing on and off value investing as a hobby investor for 8-9 years now and can share some of the mistakes to avoid. Company valuation is just as important as before. It is just the way it is done has changed quite a lot since Graham. 1. Company Growth (past and future) has to be incorporated in the valuation. Company with P/E 15 growing at 2% per year is more expensive than company with P/E 30 growing at 40%. This is the reason FB and GOOG are actually a value plays nowadays. 2. As already said the value of Intellectual Property, Software and Human Capital can't be easily read from the balance sheet alone. Yet these are the most valuable assets that yield highest returns. 3. If the founder of the company is CEO and large shareholder the company is worth a lot more than if not. 4. Doing all this research on your own is hard and very time consuming. There are some excellent paid stock newsletters with great track record that can do this for you for 300$ per year or less. Do yourself a favor and use them. Your family will thank you.